As filed
with the Securities and Exchange Commission on October 18,
2010
Registration
No. 333-167951
SECURITIES AND EXCHANGE
COMMISSION
Washington, DC 20549
Amendment No. 5
to
Form S-1
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF
1933
Bravo Brio Restaurant Group,
Inc.
(Exact name of registrant as
specified in its charter)
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Ohio
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5812
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34-1566328
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(State or Other Jurisdiction
of Incorporation or Organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification No.)
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777 Goodale Boulevard, Suite 100
Columbus, Ohio 43212
(614) 326-7944
(Address, including zip code,
and telephone number, including area code, of registrants
principal executive offices)
Saed Mohseni
President and Chief Executive Officer
777 Goodale Boulevard, Suite 100
Columbus, Ohio 43212
(614) 326-7944
(Name, address including zip
code, and telephone number, including area code, of agent for
service)
With copies to:
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Carmen J. Romano, Esq.
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Marc D. Jaffe, Esq.
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James A. Lebovitz, Esq.
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Ian D. Schuman, Esq.
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Dechert LLP
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Latham & Watkins LLP
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Cira Centre
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885 Third Avenue
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2929 Arch Street
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New York, New York 10022
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Philadelphia, Pennsylvania 19104
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(212) 906-1200
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(215) 994-4000
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Approximate date of commencement of proposed sale to the
public:
As soon as practicable after the
effective date of this Registration Statement.
If any of the securities being registered on this Form are being
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933 check the
following
box:
o
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same
offering.
o
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering.
o
If this Form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering.
o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in Rule
12b-2
of the
Exchange Act. (Check one):
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Large
accelerated
filer
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Accelerated
filer
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Non-accelerated
filer
þ
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Smaller reporting
company
o
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(Do not check if a smaller reporting company)
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
EXPLANATORY
NOTE
This Amendment No. 5 to the Registration Statement on
Form S-1 of Bravo Brio Restaurant Group, Inc. is filed
solely for the purpose of filing Exhibits 1.1, 5.1, 10.16
and 23.2 thereto.
Part II
Information Not
Required In Prospectus
Item 13.
Other Expenses of Issuance and Distribution.
The following table sets forth the costs and expenses, other
than the underwriting discount, payable by the registrant in
connection with the sale of the common stock being registered.
All amounts shown are estimates, other than the SEC registration
fee, the FINRA filing fee and the Nasdaq Global Market listing
fee.
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SEC registration fee
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$
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12,300
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FINRA filing fee
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15,333
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Nasdaq Global Market listing fee
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25,000
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Accounting fees and expenses
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750,000
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Legal fees and expenses
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1,500,000
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Printing and engraving expenses
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125,000
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Registration and transfer agent fees
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3,500
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Blue sky fees and expenses
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15,000
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Miscellaneous
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303,867
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Total
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2,750,000
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Item 14.
Indemnification of Directors and Officers.
Ohios Revised Code expressly authorizes and our Second
Amended and Restated Regulations will provide for
indemnification by us of any person who, because such person is
or was a director or officer of the Company was or is a party;
or is threatened to be made a party to:
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any threatened, pending or completed civil action, suit or
proceeding;
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any threatened, pending or completed criminal action, suit or
proceeding;
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any threatened, pending or completed administrative action or
proceeding; or
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any threatened, pending or completed investigative action or
proceeding.
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The indemnification will be for actual and reasonable expenses,
including attorneys fees, judgments, fines and amounts
paid in settlement by such person in connection with such
action, suit or proceeding, to the extent and under the
circumstances permitted by the Ohio Revised Code.
Section 1701.13(E)(7) of the Ohio Revised Code authorizes a
corporation to purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of
the corporation against any liability asserted against and
incurred by such person in any such capacity, or arising out of
such persons status as such. We have obtained liability
insurance covering our directors and officers for claims
asserted against them or incurred by them in such capacity,
including claims brought under the Securities Act of 1933, as
amended, (the Securities Act).
Reference is made to the Form of Underwriting Agreement filed as
Exhibit 1.1 hereto for provisions providing that the
underwriters are obligated under certain circumstances to
indemnify our directors, officers and controlling persons
against certain liabilities under the Securities Act.
Reference is made to Item 17 for our undertakings with
respect to indemnification for liabilities arising under the
Securities Act.
II-1
Item 15.
Recent Sales of Unregistered Securities.
Except as set forth below, in the three years preceding the
filing of this registration statement, we have not issued any
securities that were not registered under the Securities Act.
The following does not give effect to the reorganization
transactions as defined in the prospectus that forms a part of
this registration statement.
During August 2007, we sold 38.25 shares of our
Series A 14.0% Cumulative Compounding Preferred Stock for
an aggregate offering price of $38,250 and 675 shares of
our common stock for an aggregate offering price of $6,750 to
certain of our employees, officers, directors and consultants.
The sale and issuance was deemed exempt from registration under
the Securities Act by virtue of Rule 701 promulgated
thereunder. In accordance with Rule 701, the shares were
issued pursuant to a written compensatory benefit plan and the
issuance did not, during any consecutive twelve month period,
exceed 15% of the outstanding shares of our common stock,
calculated in accordance with its provisions.
During November 2007, we sold 21.25 shares of our
Series A 14.0% Cumulative Compounding Preferred Stock for
an aggregate offering price of $21,250 and 375 shares of
our common stock for an aggregate offering price of $3,750 to
certain of our employees, officers, directors and consultants.
The sale and issuance was deemed exempt from registration under
the Securities Act by virtue of Rule 701 promulgated
thereunder. In accordance with Rule 701, the shares were
issued pursuant to a written compensatory benefit plan and the
issuance did not, during any consecutive twelve month period,
exceed 15% of the outstanding shares of our common stock,
calculated in accordance with its provisions.
During July 2008, we sold 85 shares of our Series A
14.0% Cumulative Compounding Preferred Stock for an aggregate
offering price of $85,000 and 1,500 shares of our common
stock for an aggregate offering price of $15,000 to certain of
our employees, officers, directors and consultants. The sale and
issuance was deemed exempt from registration under the
Securities Act by virtue of Rule 701 promulgated
thereunder. In accordance with Rule 701, the shares were
issued pursuant to a written compensatory benefit plan and the
issuance did not, during any consecutive twelve month period,
exceed 15% of the outstanding shares of our common stock,
calculated in accordance with its provisions.
During April 2009, we sold 111.125 shares of our
Series A 14.0% Cumulative Compounding Preferred Stock for
an aggregate offering price of $111,125 and 637.5 shares of
our common stock for an aggregate offering price of $3,187.50 to
certain of our employees, officers, directors and consultants.
The sale and issuance was deemed exempt from registration under
the Securities Act by virtue of Rule 701 promulgated
thereunder. In accordance with Rule 701, the shares were
issued pursuant to a written compensatory benefit plan and the
issuance did not, during any consecutive twelve month period,
exceed 15% of the outstanding shares of our common stock,
calculated in accordance with its provisions.
During May 2009, we sold 38 shares of our Series A
14.0% Cumulative Compounding Preferred Stock for an aggregate
offering price of $38,000 and 400 shares of our common
stock for an aggregate offering price of $2,000 to certain of
our employees, officers, directors and consultants. The sale and
issuance was deemed exempt from registration under the
Securities Act by virtue of Rule 701 promulgated
thereunder. In accordance with Rule 701, the shares were
issued pursuant to a written compensatory benefit plan and the
issuance did not, during any consecutive twelve month period,
exceed 15% of the outstanding shares of our common stock,
calculated in accordance with its provisions.
During September 2009, we sold 30 shares of our
Series A 14.0% Cumulative Compounding Preferred Stock for
an aggregate offering price of $30,000 to certain of our
employees, officers, directors and consultants. The sale and
issuance was deemed exempt from registration under the
Securities Act by virtue of Rule 701 promulgated
thereunder. In accordance with Rule 701, the shares were
issued pursuant to a written compensatory benefit plan and the
issuance did not, during any consecutive twelve month period,
exceed 15.0% of the outstanding shares of our common stock,
calculated in accordance with its provisions.
None of the foregoing transactions involved any underwriters,
underwriting discounts or commissions or any public offering.
The recipients of securities in such transactions represented
their intentions to acquire the securities for investment only
and not with a view to or for sale in connection with any
distribution thereof, and appropriate legends were affixed to
the share certificates and instruments issued in such
transactions. All recipients either
II-2
received adequate information about us or had adequate access,
through their relationship with us, to such information.
Item 16.
Exhibits and Financial Statement Schedules.
(a) Exhibits
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Exhibit
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Number
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Document
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1
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.1
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Form of Underwriting Agreement.
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3
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.1*
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Form of Second Amended and Restated Articles of Incorporation of
Bravo Brio Restaurant Group, Inc.
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3
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.2*
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Form of Second Amended and Restated Regulations of Bravo Brio
Restaurant Group, Inc.
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4
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.1*
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Form of Common Stock Certificate.
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5
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.1
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Opinion of Vorys, Sater, Seymour and Pease LLP.
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10
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.1*
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Note Purchase Agreement, dated as of June 29, 2006, by and
among Bravo Development, Inc., as borrower, Bravo Development
Holdings, LLC and the domestic subsidiaries of the borrower from
time to time parties thereto, as guarantors, the Purchasers
Party thereto, as purchasers, and Golub Capital Incorporated, as
administrative agent.
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10
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.2*
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First Amendment to Note Purchase Agreement, dated as of
March 17, 2008, by and among Bravo Development, Inc.,
Bravo Development Holdings, LLC, the Guarantors, the Purchasers
and Golub Capital Incorporated, as administrative agent.
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10
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.3*
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New Investors Securities Holders Agreement, dated as of
June 29, 2006, by and among Bravo Development, Inc.,
Bravo Development Holding LLC and the other investors and
parties named therein.
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10
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.4*
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Securities Holders Agreement, dated as of June 29, 2006, by
and among Bravo Development, Inc., Bravo Development
Holdings LLC, Alton F. Doody, III, John C. Doody and the
other investors and parties named therein.
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10
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.5*
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Registration Rights Agreement, dated as of June 29, 2006,
by and among Bravo Development, Inc., Bravo Development Holdings
LLC and the other investors named therein.
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10
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.6*
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Management Agreement, dated as of June 29, 2006, by and
among Bruckmann Rosser, Sherrill & Co., Inc., Castle
Harlan, Inc. and Bravo Development, Inc.
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10
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.7*
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Management Agreement, dated as of June 29, 2006, by and
among Castle Harlan, Inc., Bruckmann Rosser,
Sherrill & Co., Inc. and Bravo Development, Inc.
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10
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.8*
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Employment Agreement, effective January 12, 2007, by and
between Bravo Development, Inc. and Saed Mohseni.
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10
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.9*
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Form of Employment Agreement by and between Bravo Brio
Restaurant Group, Inc. and James J. OConnor.
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10
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.10*
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Bravo Development, Inc. 2006 Stock Option Plan.
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10
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.11*
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Amendment No. 1 to the Bravo Development, Inc. 2006 Stock
Option Plan.
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10
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.12*
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Form of Option Award Letter under the Bravo Development, Inc.
2006 Stock Option Plan.
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10
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.13*
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Form of Bravo Brio Restaurant Group, Inc. Stock Incentive Plan.
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10
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.14*
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Form of Non-Qualified Option Award Letter under the Bravo Brio
Restaurant Group, Inc. Stock Incentive Plan.
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10
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.15*
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Form of Restricted Stock Award Letter under the Bravo Brio
Restaurant Group, Inc. Stock Incentive Plan.
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10
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.16
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Form of Exchange Agreement by and among Bravo Brio Restaurant
Group, Inc., Bravo Development Holdings LLC and all other
shareholders of Bravo Brio Restaurant Group, Inc. listed on the
signature pages thereto.
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10
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.17*
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Form of Plan of Reorganization by and between Bravo Brio
Restaurant Group, Inc. and Bravo Development Holdings LLC.
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10
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.18*
**
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Bravo! Development, Inc. Foodservice Distribution Agreement,
dated as of June 18, 2006, by and between Bravo
Development, Inc. and Distribution Market Advantage, Inc.
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II-3
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Exhibit
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Number
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Document
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10
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.19*
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Commitment Letter, dated as of October 4, 2010, by and among
Bravo Brio Restaurant Group, Inc., Wells Fargo Bank, National
Association, Bank of America, N.A., Wells Fargo Securities, LLC
and Banc of America Securities LLC.
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21
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.1*
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Subsidiaries of Bravo Brio Restaurant Group, Inc.
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23
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.1*
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Consent of Deloitte & Touche LLP.
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23
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.2
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Consent of Vorys, Sater, Seymour and Pease LLP (included in
Exhibit 5.1).
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23
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.3*
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Consent of James S. Gulmi.
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23
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.4*
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Consent of Fortunato N. Valenti.
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24
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.1*
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Powers of Attorney.
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99
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.1*
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Consent of Technomic, Inc.
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*
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Previously filed.
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**
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Certain information in this exhibit has been omitted and filed
separately with the SEC. Confidential treatment has been
requested with respect to the omitted portions.
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(b) Financial Statement Schedule
See the Index to Financial Statements included on
page F-1
for a list of the financial statements included in this
registration statement.
All schedules not identified above have been omitted because
they are not required, are not applicable or the information is
included in the selected consolidated financial data or notes
contained in this registration statement.
Item 17.
Undertakings.
a. The undersigned registrant hereby undertakes to provide
to the underwriters at the closing specified in the underwriting
agreements, certificates in such denominations and registered in
such names as required by the underwriters to permit prompt
delivery to each purchaser.
b. Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final
adjudication of such issue.
c. The undersigned registrant hereby undertakes that:
1. For purposes of determining any liability under the
Securities Act, the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as
of the time it was declared effective.
2. For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial
bona fide
offering thereof.
II-4
Signatures
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Columbus, State of Ohio, on
October 18, 2010.
Bravo Brio Restaurant Group, Inc.
Saed Mohseni
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons
in the capacities indicated on the
18
th
day
of October, 2010.
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Signature
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Title
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/s/ Saed
Mohseni
Saed
Mohseni
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President, Chief Executive Officer and Director (Principal
Executive Officer)
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/s/ James
J. OConnor
James
J. OConnor
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Chief Financial Officer, Treasurer and Secretary (Principal
Financial and
Accounting Officer)
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*
Alton
F. Doody, III
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Director
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Harold
O. Rosser II
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Director
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David
B. Pittaway
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Director
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Michael
J. Hislop
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Director
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Allen
J. Bernstein
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Director
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*By
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/s/ James
J. OConnor
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Name: James J. OConnor
Title: Attorney-in-fact
II-5
Exhibit Index
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Exhibit
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Number
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Document
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1
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.1
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Form of Underwriting Agreement.
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3
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.1*
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Form of Second Amended and Restated Articles of Incorporation of
Bravo Brio Restaurant Group, Inc.
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3
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.2*
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Form of Second Amended and Restated Regulations of Bravo Brio
Restaurant Group, Inc.
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4
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.1*
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Form of Common Stock Certificate.
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5
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.1
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Opinion of Vorys, Sater, Seymour and Pease LLP.
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10
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.1*
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Note Purchase Agreement, dated as of June 29, 2006, by and
among Bravo Development, Inc., as borrower, Bravo Development
Holdings, LLC and the domestic subsidiaries of the borrower from
time to time parties thereto, as guarantors, the Purchasers
Party thereto, as purchasers, and Golub Capital Incorporated, as
administrative agent.
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10
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.2*
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First Amendment to Note Purchase Agreement, dated as of
March 17, 2008, by and among Bravo Development, Inc., Bravo
Development Holdings, LLC, the Guarantors, the Purchasers and
Golub Capital Incorporated, as administrative agent.
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10
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.3*
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New Investors Securities Holders Agreement, dated as of
June 29, 2006, by and among Bravo Development, Inc., Bravo
Development Holding LLC and the other investors and parties
named therein.
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10
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.4*
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Securities Holders Agreement, dated as of June 29, 2006, by
and among Bravo Development, Inc., Bravo Development
Holdings LLC, Alton F. Doody, III, John C. Doody and the
other investors and parties named therein.
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10
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.5*
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Registration Rights Agreement, dated as of June 29, 2006,
by and among Bravo Development, Inc., Bravo Development Holdings
LLC and the other investors named therein.
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10
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.6*
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Management Agreement, dated as of June 29, 2006, by and
among Bruckmann Rosser, Sherrill & Co., Inc., Castle
Harlan, Inc. and Bravo Development, Inc.
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10
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.7*
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Management Agreement, dated as of June 29, 2006, by and
among Castle Harlan, Inc., Bruckmann Rosser,
Sherrill & Co., Inc. and Bravo Development, Inc.
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10
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.8*
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Employment Agreement, effective January 12, 2007, by and
between Bravo Development, Inc. and Saed Mohseni.
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10
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.9*
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Form of Employment Agreement by and between Bravo Brio
Restaurant Group, Inc. and James J. OConnor.
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10
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.10*
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Bravo Development, Inc. 2006 Stock Option Plan.
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10
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.11*
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Amendment No. 1 to the Bravo Development, Inc. 2006 Stock
Option Plan.
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10
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.12*
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Form of Option Award Letter under the Bravo Development, Inc.
2006 Stock Option Plan.
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10
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.13*
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Form of Bravo Brio Restaurant Group, Inc. Stock Incentive Plan.
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10
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.14*
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Form of Non-Qualified Option Award Letter under the Bravo Brio
Restaurant Group, Inc. Stock Incentive Plan.
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10
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.15*
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Form of Restricted Stock Award Letter under the Bravo Brio
Restaurant Group, Inc. Stock Incentive Plan.
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10
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.16
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Form of Exchange Agreement by and among Bravo Brio Restaurant
Group, Inc., Bravo Development Holdings LLC and all other
shareholders of Bravo Brio Restaurant Group, Inc. listed on the
signature pages thereto.
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10
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.17*
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Form of Plan of Reorganization by and between Bravo Brio
Restaurant Group, Inc. and Bravo Development Holdings LLC.
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10
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.18*
**
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Bravo! Development, Inc. Foodservice Distribution Agreement,
dated as of June 18, 2006, by and between Bravo
Development, Inc. and Distribution Market Advantage, Inc.
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10
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.19*
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Commitment Letter, dated as of October 4, 2010, by and among
Bravo Brio Restaurant Group, Inc., Wells Fargo Bank, National
Association, Bank of America, N.A., Wells Fargo Securities, LLC
and Banc of America Securities LLC.
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21
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.1*
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Subsidiaries of Bravo Brio Restaurant Group, Inc.
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23
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.1*
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Consent of Deloitte & Touche LLP.
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II-6
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Exhibit
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Number
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Document
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23
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.2
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Consent of Vorys, Sater, Seymour and Pease LLP (included in
Exhibit 5.1).
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23
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.3*
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Consent of James S. Gulmi.
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23
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.4*
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Consent of Fortunato N. Valenti.
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24
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.1*
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Powers of Attorney.
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99
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.1*
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Consent of Technomic, Inc.
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*
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Previously filed.
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**
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Certain information in this exhibit has been omitted and filed
separately with the SEC. Confidential treatment has been
requested with respect to the omitted portions.
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II-7
Exhibit 1.1
8,333,000
Bravo Brio Restaurant Group, Inc.
Common Shares
UNDERWRITING AGREEMENT
October [ ], 2010
JEFFERIES & COMPANY, INC.
PIPER JAFFRAY & CO.
WELLS FARGO SECURITIES, LLC
As Representatives of the several Underwriters
c/o JEFFERIES & COMPANY, INC.
520 Madison Avenue
New York, New York 10022
Ladies and Gentlemen:
Introductory.
Bravo Brio Restaurant Group, Inc., an Ohio corporation (the
Company
),
proposes to issue and sell to the several underwriters named in
Schedule A
(the
Underwriters
) an aggregate of 5,000,000 common shares, no par value per share (the
Shares
); and the
shareholders of the Company named in
Schedule B
(collectively, the
Selling Shareholders
)
severally propose to sell to the Underwriters an aggregate of
3,333,000 Shares. The 5,000,000 Shares to be
sold by the Company (the
Company Shares
) and the
3,333,000 Shares to be sold by the Selling
Shareholders are collectively referred to herein as the
Firm Shares
. In addition, the Selling
Shareholders have severally granted to the Underwriters an option to purchase up to an additional
1,249,950 Shares, with each Selling Shareholder selling up to the amount set forth opposite such
Selling Shareholders name in
Schedule B
, as provided in Section 2(c). The additional
1,249,950 Shares to be sold by the Selling Shareholders pursuant to such option are collectively called
the
Optional Shares
. The Firm Shares and, if and to the extent such option is exercised, the
Optional Shares are collectively called the
Offered Shares
. Jefferies & Company, Inc.
(
Jefferies
), Piper Jaffray & Co. (
Piper Jaffray
) and Wells Fargo Securities, LLC (
Wells Fargo
and, together with Jefferies and Piper Jaffray, the
Representatives
) have agreed to act as
representatives of the several Underwriters in connection with the offering and sale of the Offered
Shares.
Jefferies agrees that up to 50,000 of the Firm Shares to be purchased by it (the
Directed Shares
)
shall be reserved for sale by Jefferies and its affiliates to certain eligible employees of
Bruckmann, Rosser, Sherrill & Co. Management, L.P., an affiliate of a principal shareholder of the
Company (collectively, the
Participants
), as part of the distribution of the Offered Shares by
Jefferies (the
Directed Share Program
) subject to the terms of this Agreement, the applicable
rules, regulations and interpretations of the Financial Industry Regulatory Authority, Inc.
(
FINRA
) and all other applicable laws, rule and regulations. To the extent that such Directed
Shares are not orally confirmed for purchase by the Participants by the end of the first business
day after the date of this Agreement, such Directed Shares may be offered to the public by the
Underwriters as part of the public offering contemplated hereby.
The Company has prepared and filed with the Securities and Exchange Commission (the
Commission
) a registration statement on Form S-1 (File No. 333-167951), which contains a form of
prospectus to be used in connection with the public offering and sale of the Offered Shares. Such
registration statement, as amended, including the financial statements, exhibits and schedules
thereto, in the form in which it was declared effective by the Commission under the Securities Act
of 1933, as amended, and the rules and regulations promulgated thereunder (collectively, the
Securities Act
), including any information deemed to be a part thereof at the time of
effectiveness pursuant to Rule 430A promulgated under the Securities Act, is called the
Registration Statement
. Any registration statement filed by the Company pursuant to Rule
462(b) promulgated under the Securities Act is called the
Rule 462(b) Registration
Statement
, and from and after the date and time of filing of the Rule 462(b) Registration
Statement the term Registration Statement shall include the Rule 462(b) Registration Statement.
The preliminary prospectus dated October 7, 2010 describing the Offered Shares and the offering
thereof is called the
Preliminary Prospectus,
and the Preliminary Prospectus and any other
preliminary prospectus that describes the Offered Shares and the offering thereof and is used prior
to the filing of the Prospectus (as defined below), is called a
preliminary prospectus
. As used
herein, the term
Prospectus
shall mean the final prospectus that describes the Offered Shares and
the offering thereof in the form first used by the Underwriters to confirm sales of the Offered
Shares or in the form first made available to the Underwriters by the Company to meet requests of
purchasers pursuant to Rule 173 promulgated under the Securities Act. As used herein,
Applicable
Time
is [__:__ _m]. (New York time) on October [ ], 2010. As used herein,
free writing
prospectus
has the meaning set forth in Rule 405 promulgated under the Securities Act, and
Time
of Sale Prospectus
means the preliminary prospectus, as amended or supplemented immediately prior
to the Applicable Time, together with the free writing prospectuses, if any, identified in
Schedule C
hereto, and each road show (as defined in Rule 433 under the Securities Act),
if any, related to the offering of the Shares contemplated hereby that is a written communication
(as defined in Rule 405 promulgated under the Securities Act) (each such road show, a
Road Show
).
All references in this Agreement to (i) the Registration Statement, the 462(b) Registration
Statement, any Preliminary Prospectus, a preliminary prospectus or the Prospectus, or any
amendments or supplements to any of the foregoing, shall include any copy thereof filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval System (
EDGAR
) and
(ii) the Prospectus shall be deemed to include the
electronic Prospectus
provided for use in
connection with the offering of the Offered Shares as contemplated by Section 3(A)(xiv) of this
Agreement.
The Company and the Selling Shareholders hereby confirm their engagement of Jefferies &
Company, Inc. (in its capacity as the qualified underwriter and not otherwise,
QIU
) as, and the
QIU hereby confirms its agreement with the Company and the Selling Shareholders to render services
as, a
qualified independent underwriter
, within the meaning of Section (b)(15) of Rule 2720 of
the National Association of Securities Dealers, Inc. (the
NASD
) with respect to the offering and
sale of the Offered Shares. The QIU will not receive any compensation
for its services as QIU with respect to the offering and sale of the
Offered Shares.
The Company and each of the Selling Shareholders hereby confirm their respective agreements
with the Underwriters and the QIU as follows:
Section 1. Representations and Warranties of the Company
A.
The Company hereby represents, warrants and covenants to each Underwriter, as of the date
of this Agreement, as of the First Closing Date (as hereinafter defined) and as of each Option
Closing Date (as hereafter defined), if any, as follows:
(i)
Compliance
with Registration Requirements.
2
The Registration Statement and any Rule 462(b) Registration Statement have been declared
effective by the Commission under the Securities Act. The Company has complied to the Commissions
satisfaction with all requests of the Commission for additional or supplemental information. No
stop order suspending the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement is in effect and no proceedings for such purpose have been instituted or are
pending or, to the best knowledge of the Company, are contemplated or threatened by the
Commission.
Each preliminary prospectus and the Prospectus when filed complied in all material
respects with the Securities Act and, if filed by electronic transmission pursuant to EDGAR (except
as may be permitted by Regulation S-T promulgated under the Securities Act), was identical to the
copy thereof delivered to the Underwriters for use in connection with the offer and sale of the
Offered Shares. Each of the Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto, at the time it became effective and until such time as the
Underwriters are no longer required to deliver a Prospectus in order to confirm sales of the
Offered Shares, complied and will comply in all material respects with the Securities Act and did
not and will not contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not misleading. As of
the Applicable Time, the Time of Sale Prospectus (including any preliminary prospectus wrapper) did
not, and at the time of each sale of the Offered Shares and at the First Closing Date, the Time of
Sale Prospectus, as then amended or supplemented by the Company, if applicable, will not, contain
any untrue statement of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading.
The Prospectus (including any preliminary prospectus wrapper), as amended or supplemented, as of
its date and until such time as the Underwriters are no longer required to deliver a Prospectus in
order to confirm sales of the Offered Shares, did not and will not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading. The representations
and warranties set forth in the three immediately preceding sentences do not apply to statements in
or omissions from the Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment thereto, or the Prospectus or the Time of Sale Prospectus, or any
amendments or supplements thereto, made in reliance upon and in conformity with information
relating to any Underwriters furnished to the Company in writing by the Representatives expressly
for use therein, it being understood and agreed that the only such information furnished by the
Representatives to the Company consists of the information described in Section 9(c) below. There
are no contracts or other documents required to be described in the Time of Sale Prospectus or the
Prospectus or to be filed as exhibits to the Registration Statement which have not been described
or filed as required.
The Company is not an ineligible issuer in connection with the offering of the Offered
Shares pursuant to Rules 164, 405 and 433 promulgated under the Securities Act. Any free writing
prospectus that the Company is required to file pursuant to Rule 433(d) promulgated under the
Securities Act has been, or will be, filed with the Commission in accordance with the requirements
of the Securities Act. Each free writing prospectus that the Company has filed, or is required to
file, pursuant to Rule 433(d) promulgated under the Securities Act or that was prepared by or
behalf of or used or referred to by the Company complies or will comply in all material respects
with the requirements of Rule 433 promulgated under the Securities Act including timely filing with
the Commission or retention where required and legending, and each such free writing prospectus, as
of its issue date and at all subsequent times through the completion of the public offer and sale
of the Offered Shares did not, does not and will not include any information that conflicted with,
conflicts with or will conflict with the information
3
contained in the Registration Statement, the Prospectus or any preliminary prospectus. The
representations and warranties set forth in the immediately preceding sentence do not apply to
statements made in reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by the Representatives expressly for use therein, it being
understood and agreed that the only such information furnished by the Representatives to the
Company consists of the information described in Section 9(c) below. Except for the free writing
prospectuses, if any, identified in
Schedule C
hereto, and electronic road shows, if any,
furnished to you before first use, the Company has not prepared, used or referred to, and will not,
without your prior consent, prepare, use or refer to, any free writing prospectus.
(ii)
Offering Materials Furnished to Underwriters
. The Company has delivered to each of the Representatives (i) one complete copy of the
Registration Statement, each amendment thereto and any Rule 462(b) Registration Statement and of
each consent and certificate of experts filed as a part thereof, and (ii) conformed copies of the
Registration Statement, each amendment thereto and any Rule 462(b) Registration Statement (without
exhibits) and preliminary prospectuses, the Time of Sale Prospectus, the Prospectus, as amended or
supplemented, and any free writing prospectus reviewed and consented to by the Representatives, in
such quantities and at such places as the Representatives have reasonably requested for each of the
Underwriters.
(iii)
Distribution of Offering Material By the Company
. The Company has not distributed and will not distribute, prior to the later of (i) the
expiration or termination of the option granted to the several Underwriters in Section 2, (ii) the
completion of the Underwriters distribution of the Offered Shares, and (iii) the expiration of 25
days after the date of the Prospectus, any offering material in connection with the offering and
sale of the Offered Shares other than a preliminary prospectus, the Time of Sale Prospectus, the
Prospectus, any free writing prospectus reviewed and consented to by the Representatives, or the
Registration Statement.
(iv)
The Underwriting Agreement
. This Agreement has been duly authorized, executed and delivered by the Company.
(v)
Authorization of the Company Shares
. The Company Shares have been duly authorized for issuance and sale pursuant to this
Agreement and, when issued and delivered by the Company pursuant to this Agreement for the
consideration set forth herein, will be validly issued, fully paid and nonassessable, and the
issuance and sale of the Company Shares is not subject to any preemptive rights, rights of first
refusal or other similar rights to subscribe for or purchase the Company Shares.
(vi)
No Applicable Registration or Other Similar Rights
. Except as otherwise disclosed in the Time of Sale Prospectus, there are no persons with
registration or other similar rights to have any equity or debt securities registered for sale
under the Registration Statement or included in the offering contemplated by this
4
Agreement, other than the Selling Shareholders with respect to the Offered Shares included in
the Registration Statement, except for such rights as have been duly waived.
(vii)
No Material Adverse Change
. Except as otherwise disclosed in the Time of Sale Prospectus, subsequent to the respective
dates as of which information is given in Time of Sale Prospectus: (i) there has been no material
adverse change, or any development that could reasonably be expected to result in a material
adverse change, in the condition, financial or otherwise, or in the earnings, business, results of
operations or prospects, whether or not arising from transactions in the ordinary course of
business, of the Company and its subsidiaries, considered as one entity (any such change is called
a
Material Adverse Change
); (ii) the Company and its subsidiaries, considered as one entity, have
not incurred any material liability or obligation, indirect, direct or contingent, not in the
ordinary course of business nor entered into any material transaction or agreement not in the
ordinary course of business; and (iii) there has been no dividend or distribution of any kind
declared, paid or made by the Company or, except for dividends paid to the Company or other
subsidiaries, any of its subsidiaries on any class of capital stock or repurchase or redemption by
the Company or any of its subsidiaries of any class of capital stock.
(viii)
Independent Accountants
. Deloitte & Touche LLP, who have expressed their opinion with respect to the financial
statements (which term as used in this Agreement includes the related notes thereto) filed with the
Commission as a part of the Registration Statement and included in the Preliminary Prospectus, the
Prospectus and the Time of Sale Prospectus (each, an
Applicable Prospectus
and collectively, the
Applicable Prospectuses
), are (i) independent public or certified public accountants as required
by the Securities Act, (ii) in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X and (iii) are a registered public
accounting firm as defined by the Public Company Accounting Oversight Board (the
PCAOB
) whose
registration has not been suspended or revoked and who have not requested such registration to be
withdrawn.
(ix)
Preparation of the Financial Statements
. The financial statements filed with the Commission as a part of the Registration Statement
and included in the Preliminary Prospectus, the Time of Sale Prospectus and the Prospectus present
fairly in all material respects the consolidated financial position of the Company and its
subsidiaries as of and at the dates indicated and the results of their operations and cash flows
for the periods specified. Such financial statements have been prepared in conformity with
generally accepted accounting principles in the United States applied on a consistent basis
throughout the periods involved, except as may be expressly stated in the related notes thereto.
No other financial statements or supporting schedules are required to be included in the
Registration Statement or any Applicable Prospectus. The financial data set forth in each
Applicable Prospectus under the captions Prospectus SummarySummary Historical Consolidated
Financial and Operating Data, Selected Historical Consolidated Financial and Operating Data and
Capitalization fairly present the information set forth therein on a basis consistent with that
of the audited financial statements contained in the Registration Statement and each Applicable
Prospectus. To the Companys actual knowledge, no person who has been suspended or barred from
being associated with a registered public accounting firm, or who has failed to comply with any
sanction pursuant to Rule 5300 promulgated by the PCAOB, has participated in or otherwise aided the
preparation of, or audited, the financial statements,
5
supporting schedules or other financial data filed with the Commission as a part of the
Registration Statement and included in any Applicable Prospectus.
(x)
The Companys Accounting System and Disclosure Controls and Procedures
. The Company and each of its subsidiaries make and keep books and records that are
accurate in all material respects and maintain a system of internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are executed in accordance with managements
general or specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted accounting principles in
the United States and to maintain accountability for assets; (iii) access to assets is permitted
only in accordance with managements general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences. Since December 31, 2009, there has not been and
is no material weakness (as defined in Public Company Accounting Oversight Board Standard No. 2)
in the Companys or any of its subsidiaries internal control over financial reporting (as defined
in Rule 13a-15(f)) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange
Act) (whether or not remediated) and, since December 31, 2009, there has been no change in the
Companys internal control over financial reporting that has materially affected, or is reasonably
likely to materially affect, the Companys internal control over financial reporting. The Company
and its subsidiaries maintain disclosure controls and procedures (as such term is defined in Rule
13a-15(e) under the Exchange Act); such disclosure controls and procedures have been designed to
ensure that material information relating to the Company and its subsidiaries is made known to the
Companys principal executive officer and principal financial officer by others within those
entities, particularly during the periods in which periodic reports required under the Exchange Act
are being prepared; and such disclosure controls and procedures are effective in all material
respects to perform the functions for which they were established.
(xi)
Incorporation and Good Standing of the Company and its Subsidiaries
. Each of the Company and its subsidiaries has been duly incorporated or organized, as the
case may be, and is validly existing as a corporation, partnership or limited liability company, as
applicable, in good standing under the laws of the jurisdiction of its incorporation or
organization, except, in the case of the Companys subsidiaries, to the extent that the failure to
be so qualified or be in good standing would not, individually or in the aggregate, result in a
Material Adverse Change, and has the power and authority (corporate or other) to own, lease and
operate its properties and to conduct its business as described in each Applicable Prospectus and,
in the case of the Company, to enter into and perform its obligations under this Agreement. The
Company and each subsidiary is duly qualified as a foreign corporation, partnership or limited
liability company, as applicable, to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of the ownership or leasing
of property or the conduct of business, except to such extent as would not, individually or in the
aggregate, result in a Material Adverse Change. All of the issued and outstanding capital stock or
other equity or ownership interests of each subsidiary have been duly authorized and validly
issued, are fully paid and nonassessable and, except as set forth in the Time of Sale Prospectus,
are owned by the Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or adverse claim, except to the extent any such
security interest, mortgage, pledge, lien encumbrance or adverse claim would not,
6
individually or in the aggregate, result in a Material Adverse Change. The Company does not
own or control, directly or indirectly, any corporation, association or other entity other than (i)
the subsidiaries listed in Exhibit 21 to the Registration Statement and (ii) such other entities
omitted from Exhibit 21 which, when such omitted entities are considered in the aggregate as a
single subsidiary, would not constitute a significant subsidiary within the meaning of Rule
1-02(w) of Regulation S-X.
(xii)
Capitalization and Other Capital Stock Matters
. The authorized, issued and outstanding capital stock of the Company is as set forth in each
Applicable Prospectus under the caption Description of Capital Stock (other than for subsequent
issuances, if any, pursuant to employee benefit plans described in the Time of Sale Prospectus or
upon the exercise of outstanding options or warrants described in each Applicable Prospectus). The
Shares (including the Offered Shares) conform in all material respects to the description thereof
contained in the Time of Sale Prospectus. All of the issued and outstanding Shares (including the
Shares owned by Selling Shareholders) have been duly authorized and validly issued, are fully paid
and nonassessable and have been issued in compliance with federal and state securities laws or
exemptions from the requirements thereof. None of the outstanding Shares was issued in violation
of any preemptive rights, rights of first refusal or other similar rights to subscribe for or
purchase securities of the Company. There are no authorized or outstanding options, warrants,
preemptive rights, rights of first refusal or other rights to purchase, or equity or debt
securities convertible into or exchangeable or exercisable for, any capital stock of the Company or
any of its subsidiaries other than those described in each Applicable Prospectus. The description
of the Companys stock option, stock bonus and other stock plans or arrangements, and the options
or other rights granted thereunder, set forth in each Applicable Prospectus fairly presents the
information required to be shown with respect to such plans, arrangements, options and rights.
(xiii)
Stock Exchange Listing
. The Offered Shares have been approved for inclusion on the Nasdaq Global Market, subject
only to official notice of issuance.
(xiv)
Non-Contravention of Existing Instruments; No Further Authorizations or Approvals
Required
. Neither the Company nor any of its subsidiaries is in violation of its charter or by-laws,
partnership agreement or operating agreement or similar organizational document, as applicable, or
is in default (or, with the giving of notice or lapse of time, would be in default) (
Default
)
under any indenture, mortgage, loan or credit agreement, note, contract, franchise, lease or other
instrument to which the Company or any of its subsidiaries is a party or by which it or any of them
may be bound (including, without limitation, any credit agreement, indenture, pledge agreement,
security agreement or other instrument or agreement evidencing, guaranteeing, securing or relating
to indebtedness of the Company or any of its subsidiaries ), or to which any of the property or
assets of the Company or any of its subsidiaries is bound (each, an
Existing Instrument
), except
for such Defaults as would not, individually or in the aggregate, result in a Material Adverse
Change. The Companys execution, delivery and performance of this Agreement, consummation of the
transactions contemplated hereby and by each Applicable Prospectus and the issuance and sale of the
Company Shares (i) have been duly authorized by all necessary corporate action and will not result
in any violation of the provisions of the charter or by-laws, partnership agreement or operating
agreement or similar organizational document of the
7
Company or any subsidiary, as applicable, (ii) except as described in the Time of Sale
Prospectus, will not conflict with or constitute a breach of, or Default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, or require the consent of any other party to, any
Existing Instrument and (iii) will not result in any violation of any law, administrative
regulation or administrative or court decree applicable to the Company or any subsidiary, except
for such conflicts, breaches, Defaults or violations specified in subsections (ii) and (iii) above
that would not, individually or in the aggregate, result in a Material Adverse Change. No consent,
approval, authorization or other order of, or registration or filing with, any court or other
governmental or regulatory authority or agency, is required for the Companys execution, delivery
and performance of this Agreement and consummation of the transactions contemplated hereby and by
each Applicable Prospectus, except such as have been obtained or made by the Company and are in
full force and effect under the Securities Act, applicable state securities or blue sky laws and
from FINRA.
(xv)
No Material Actions or Proceedings
. There are no legal or governmental actions, suits or proceedings pending or, to the
Companys knowledge, threatened (i) against or affecting the Company or any of its subsidiaries,
(ii) which have as the subject thereof any officer or director of, or property owned or leased by,
the Company or any of its subsidiaries or (iii) relating to environmental or discrimination
matters, where in any such case (A) there is a reasonable possibility that such action, suit or
proceeding might be determined adversely to the Company, such subsidiary or such officer or
director, (B) any such action, suit or proceeding, if so determined adversely, would reasonably be
expected to result in a Material Adverse Change or adversely affect the consummation of the
transactions contemplated by this Agreement or (C) any such action, suit or proceeding is or would
be material in the context of the sale of Shares. No material labor dispute with the employees of
the Company or any of its subsidiaries exists or, to the Companys actual knowledge, is threatened
or imminent.
(xvi)
Intellectual Property Rights
. The Company and its subsidiaries own or have the right to use all intellectual property and
other proprietary rights, including all trademarks, trade names, service marks, patent rights,
copyrights, domain names, licenses, approvals, trade secrets and other similar rights
(collectively,
Intellectual Property Rights
) reasonably necessary to conduct their businesses as
now conducted. All material Intellectual Property Rights of the Company and its subsidiaries are
subsisting and have not been adjudged invalid or unenforceable by any court or governmental
authority, and the expiration of any such registered Intellectual Property Rights owned or licensed
by the Company or its subsidiaries would not result in a Material Adverse Change. Neither the
Company nor any of its subsidiaries has received any written notice since December 31, 2007 of
infringement of or conflict with any asserted Intellectual Property Rights of others. The Company
is not a party to or bound by any options, licenses or agreements with respect to the Intellectual
Property Rights of any other person or entity that are required to be set forth in the Prospectus
and are not described therein. To the knowledge of the Company, the conduct of the businesses of
the Company and its subsidiaries does not infringe, dilute, misappropriate, or otherwise violate
any Intellectual Property Rights of any third party. None of the Intellectual Property Rights
employed by the Company or any of its subsidiaries has been obtained or is being used by the
Company or any of its subsidiaries in violation of any contractual obligation binding on the
Company or any of its subsidiaries or, to the Companys knowledge, any of its or its subsidiaries
officers, directors or employees or otherwise in violation of the
8
rights of any persons, except for such violations as would not, individually or in the
aggregate, result in a Material Adverse Change.
(xvii)
All Necessary Permits, etc
. Except as would not, individually or in the aggregate, result in a Material Adverse Change,
(i) the Company and its subsidiaries possess such permits, licenses, consents, approvals,
certificates, registrations, franchises, clearances and other authorizations (collectively,
Governmental Licenses
) issued by, and have made all declarations and filings with, the
appropriate federal, state, local or foreign governmental or regulatory authorities that are
necessary for and material to the conduct of their respective businesses as described in each of
the Time of Sale Prospectus and the Prospectus; (ii) the Company and its subsidiaries are in
compliance with the terms and conditions of all such Governmental Licenses; and (iii) all such
Governmental Licenses are valid and in full force and effect. The Company has fulfilled and
performed all of its obligations with respect to the Governmental Licenses of the United States
Food and Drug Administration, the United States Department of Agriculture, and any and all
comparable state and local authorities required for the conduct of its business as currently
conducted (collectively, the
Regulatory Permits
), except where failure to fulfill and perform
such obligations with respect to its Regulatory Permits would not, individually or in the
aggregate, result in a Material Adverse Change. No event has occurred that allows, or after notice
or lapse of time would allow, revocation, termination, suspension, or other modification of such
Regulatory Permits or results in any other impairment of the rights of the holder of any Regulatory
Permit that would, individually or in the aggregate, result in a Material Adverse Change. Neither
the Company nor any of its subsidiaries has received any written notice of proceedings related to
revocation, termination, suspension, or other modification of, or non-compliance with, any such
Governmental Licenses, and to the Companys knowledge no such proceedings are pending or
threatened, except where such proceedings would not, individually or in the aggregate, result in a
Material Adverse Change.
(xviii)
Compliance with Laws.
The Company has operated and currently is in compliance with all applicable laws and
implementing rules and regulations administered or enforced by all applicable federal, state
and local authorities, except where failure to be so in compliance would not, individually or
in the aggregate, result in a Material Adverse Change. Except as disclosed in the Time of Sale
Prospectus, the Company has not received notice that it or any of its subsidiaries is not
conducting business in compliance with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting business, or has not received notice, and has no
knowledge, of any pending or threatened claim, suit, proceeding, hearing, enforcement, audit,
investigation, arbitration or other action from any applicable federal, state or local
regulatory agency alleging that any operation or activity of the Company is in violation of
any applicable law, rule or regulation, except where failure to be so in compliance or such
proceeding would not, individually or in the aggregate, result in a Material Adverse Change.
(xix)
Compliance with Liquor Laws
. The Company is operating in compliance with such
Governmental Licenses of any and all jurisdictions (
Applicable Jurisdictions
) that require the
Company to obtain such Governmental Licenses in respect of its sales or distribution of alcoholic
beverages in the conduct of its business as currently conducted (collectively, the
Liquor
Permits
), and all such Liquor Permits are in full force and effect, except where the failure to be
in such compliance or for such Liquor Permits to be in full force and effect would not,
individually or in the aggregate, result in a Material Adverse Change. The Company has
9
fulfilled and performed all of its obligations with respect to the Liquor Permits, except
where the failure to be in such compliance would not, individually or in the aggregate, result in a
Material Adverse Change. To the Companys knowledge, no event has occurred that has allowed,
allows, or after notice or lapse of time would allow, revocation, termination, suspension or other
modification thereof or results in any other impairment of the rights of the holder of any Liquor
Permit that would, individually or in the aggregate, result in a Material Adverse Change. Except
as disclosed in the Time of Sale Prospectus, the Company has not received notice, and has no
knowledge, of any pending or threatened claim, suit, proceeding, hearing, enforcement, audit,
investigation, arbitration or other action from the Applicable Jurisdictions alleging that any
operation or activity of the Company is in violation of any applicable law, rule or regulation that
would, individually or in the aggregate, result in a Material Adverse Change.
(xx)
Title to Properties
. Except as disclosed in the Time of Sale Prospectus, the Company and each of its
subsidiaries has good and marketable title to all of the real and personal property and other
assets reflected as owned in the financial statements referred to in Section 1(A)(ix) above (or
elsewhere in any Applicable Prospectus), in each case free and clear of any security interests,
mortgages, liens, encumbrances, equities, adverse claims and other defects, except for such
security interests, mortgages, liens, encumbrances, equities, adverse claims and other defects as
would not be expected to, individually or in the aggregate, result in a Material Adverse Change.
The real property, improvements, equipment and personal property held under lease by the Company or
any subsidiary are held under valid and enforceable leases, subject to (1) applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent transfer or other laws affecting creditors
rights generally from time to time in effect and (2) to general principles of equity and public
policy and the discretion of the court or other body before which any proceeding may be brought,
including without limitation, concepts of materiality, reasonableness, good faith and fair dealing,
in each case, regardless of whether considered in a proceeding in equity or at law (clauses (1) and
(2), collectively, the Enforceability Exceptions) and with such exceptions that would not
reasonably be expected to, individually or in the aggregate, result in a Material Adverse Change.
(xxi)
Tax Law Compliance
. The Company and its consolidated subsidiaries have filed all required federal, state
and foreign income and franchise tax returns or have properly requested extensions thereof, and
have paid all material taxes, including withholding taxes, penalties and interest, or assessments
levied against them or required to be paid by them, except those being contested in good faith and
by appropriate proceedings and for which an adequate reserve is provided in accordance with GAAP.
The Company and its consolidated subsidiaries are not liable to make any payments of material taxes
of any third party for which they may be liable under a tax sharing agreement or pursuant to
Treasury Regulation section 1.1502-6, except those being contested in good faith and by appropriate
proceedings and for which an adequate reserve is provided in accordance with GAAP. The Company has
made adequate charges, accruals and reserves in the applicable financial statements referred to in
Section 1(A)(ix) above in respect of all taxes of the type described in the two preceding sentences
that are either not yet due and payable or contested in good faith and by appropriate proceedings.
(xxii)
Company Not an Investment Company.
10
The Company has been advised of the rules and requirements under the Investment Company Act
of 1940, as amended (the
Investment Company Act
). The Company is not, and will not be, either
after receipt of payment for the Company Shares or after the application of the proceeds therefrom
as described under Use of Proceeds in each Applicable Prospectus, an
investment company
within
the meaning of Investment Company Act.
(xxiii)
Insurance
. Each of the Company and its subsidiaries is insured by recognized institutions with
policies in such amounts and with such deductibles and covering such risks as are generally deemed
adequate and customary for their businesses including, but not limited to, policies covering real
and personal property owned or leased by the Company and its subsidiaries against theft, damage,
destruction, acts of vandalism and earthquakes and policies covering the Company and its
subsidiaries for product liability claims. The Company has no reason to believe that it or any
subsidiary will not be able (i) to renew its existing insurance coverage as and when such policies
expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or
appropriate to conduct its business as now conducted and at a cost that would not result in a
Material Adverse Change. Neither the Company nor any subsidiary has been denied any insurance
coverage which it has sought or for which it has applied.
(xxiv)
No Price Stabilization or Manipulation; Compliance with Regulation M
. The Company has not taken, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of the price of the Shares
or any other
reference security
(as defined in Rule 100 of Regulation M promulgated under the
Exchange Act (
Regulation M
)) whether to facilitate the sale or resale of the Offered Shares or
otherwise, and has taken no action which would violate Regulation M. The Company acknowledges that
the Underwriters may engage in passive market making transactions in the Offered Shares on the
Nasdaq Global Market in accordance with Regulation M.
(xxv)
Related Party Transactions
. There are no business relationships or related-party transactions involving the Company or
any of its subsidiaries or any other person required to be described in each Applicable Prospectus
(including the Time of Sale Prospectus) which have not been described as required.
(xxvi)
FINRA Matters
. All of the information provided to the Underwriters or to counsel for the Underwriters by
the Company, its officers and directors and the holders of any securities (debt or equity) or
options to acquire any securities of the Company in connection with letters, filings or other
supplemental information provided to FINRA pursuant to FINRA Rule 5110 or NASD Conduct Rule 2720 is
true, complete and correct in all material respects.
(xxvii)
Parties to Lock-Up Agreements
. Each of the Companys directors and executive officers and each of the other persons and
entities listed in
Exhibit C
has executed and delivered to the Representatives a lock-up
agreement in the form of
Exhibit D
hereto.
Exhibit C
hereto contains a true,
complete and correct list of all
11
directors and executive officers of the Company. If any additional persons shall become
directors or executive officers of the Company prior to the end of the Lock-up Period (as defined
below), the Company shall cause each such person, prior to or contemporaneously with their
appointment or election as a director or executive officer of the Company, to execute and deliver
to the Representatives an agreement in the form attached hereto as
Exhibit D
.
(xxviii)
Statistical and Market-Related Data
. The statistical, demographic and market-related data included in the Registration Statement
and each Time of Sale Prospectus are based on or derived from sources that the Company believes to
be reliable and accurate or represent the Companys good faith estimates that are made on the basis
of data derived from such sources.
(xxix)
No Unlawful Contributions or Other Payments
. Neither the Company nor any of its subsidiaries nor, to the best of the Companys
knowledge, any employee or agent of the Company or any subsidiary, has made any contribution or
other payment to any official of, or candidate for, any federal, state or foreign office in
violation of any law or of the character required to be disclosed in the Registration Statement and
each Applicable Prospectus.
(xxx)
Compliance with Environmental Laws
. Except as would not, individually or in the aggregate, result in a Material Adverse Change,
(i) neither the Company nor any of its subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law
or any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or protection of
human health, the environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including, without limitation,
laws and regulations relating to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products
(collectively,
Hazardous Materials
) or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials (collectively,
Environmental Laws
), (ii) the Company and its subsidiaries have all permits, authorizations
and approvals required under any applicable Environmental Laws and are each in compliance with
their requirements, (iii) there are no pending or, to the Companys actual knowledge, threatened administrative, regulatory or judicial actions, suits, demands, demand letters,
claims, liens, notices of noncompliance or violation, investigation or proceedings relating to
any Environmental Law against the Company or any of its subsidiaries and (iv) to the Companys
actual knowledge, there are no events or circumstances that might reasonably be expected to
form the basis of an order for clean-up or remediation, or an action, suit or proceeding by
any private party or governmental body or agency, against or affecting the Company or any of
its subsidiaries relating to Hazardous Materials or any Environmental Laws.
(xxxi)
ERISA Compliance
. The Company and its subsidiaries and any
employee benefit plan
(as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended, and the regulations and
published interpretations thereunder (collectively,
ERISA
)) established or maintained by the
Company, its subsidiaries or their
ERISA Affiliates
(as defined below) (
Benefits Plan
) are
12
in compliance with ERISA, except as would not, individually or in the aggregate, result in a
Material Adverse Change.
ERISA Affiliate
means, with respect to the Company or a subsidiary, any
member of any group of organizations described in Sections 414(b),(c),(m) or (o) of the Internal
Revenue Code of 1986, as amended, and the regulations and published interpretations thereunder (the
Code
) of which the Company or such subsidiary is a member. No
reportable event
(within the
meaning of Section 4043 of ERISA) has occurred or is reasonably expected to occur with respect to
any Benefit Plan that would result in a Material Adverse Change. Except as disclosed in the Time of
Sale Prospectus or as would not, individually or in the aggregate, result in a Material Adverse
Change, (i) no Benefit Plan, if such Benefit Plan were terminated, would have any
amount of
unfunded benefit liabilities
(as defined in Section 4001(a)(18) of ERISA), (ii) neither the
Company, its subsidiaries nor any of their ERISA Affiliates has incurred or reasonably expects to
incur any liability under (A) Title IV of ERISA with respect to termination of, or withdrawal from
any Benefits Plan or (B) Sections 412, 4971 or 4975 of the Code and (iii) each Benefit Plan that is
intended to be qualified under Section 401(a) of the Code is so qualified and nothing has occurred,
whether by action or failure to act, which would cause the loss of such qualification.
(xxxii)
Brokers
. Except for the underwriting discounts and commissions payable to the Underwriters as
described in the Time of Sale Prospectus and the Prospectus, there is no broker, finder or
other similar party that is entitled to receive from the Company any brokerage or finders fee
or other similar fee or commission as a result of any transactions contemplated by this
Agreement.
(xxxiii)
Dividend Restrictions
. Except as disclosed in the Time of Sale Prospectus, no subsidiary of the Company is prohibited
or restricted, directly or indirectly, from paying dividends to the Company, or from making any
other distribution with respect to such subsidiarys equity securities or from repaying to the
Company or any other subsidiary of the Company any amounts that may from time to time become due
under any loans or advances to such subsidiary from the Company or from transferring any property
or assets to the Company or to any other subsidiary.
(xxxiv)
No Outstanding Loans or Other Extensions of Credit
. Neither the Company nor any of its subsidiaries has extended or maintained credit, arranged for
the extension of credit, or renewed any extension of credit, in the form of a personal loan, to or
for any director or executive officers (or equivalent thereof) of the Company and/or such
subsidiary, except for such extensions of credit as are expressly permitted by Section 13(k) of the
Exchange Act.
(xxxv)
Foreign Corrupt Practices Act
. Neither the Company nor any of its subsidiaries nor,
to the knowledge of the Company, any director, officer, agent, employee, affiliate or other person
acting on behalf of the Company or any of its subsidiaries is aware of or has taken any action,
directly or indirectly, that has resulted or would result in a violation of the Foreign Corrupt
Practices Act of 1977, as amended, and the rules and regulations thereunder (the
FCPA
),
including, without limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization
of the payment of any money, or other property, gift, promise to give, or authorization of the
giving of anything of value to any foreign official (as such term is defined in the FCPA) or any
foreign political party or official thereof or any candidate for foreign
13
political office, in contravention of the FCPA; and the Company and its subsidiaries and, to
the knowledge of the Company, the Companys affiliates have conducted their respective businesses
in compliance with the FCPA and have instituted and maintain policies and procedures designed to
ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
(xxxvi)
Money Laundering Laws
. The operations of the Company and its subsidiaries are, and
have been conducted at all times, in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended,
the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001, as amended, money laundering statutes of all applicable
jurisdictions, the rules and regulations thereunder and any related or similar applicable rules,
regulations or guidelines, issued, administered or enforced by any governmental agency
(collectively, the
Money Laundering Laws
), except to the extent that any such noncompliance would
not, individually or in the aggregate, result in a Material Adverse Change, and no action, suit or
proceeding by or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is
pending or, to the actual knowledge of the Company, threatened.
(xxxvii)
OFAC
. Neither the Company nor any of its subsidiaries nor, to the knowledge of the
Company, any director, officer, agent, employee, affiliate or person acting on behalf of the
Company or any of its subsidiaries is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department (
OFAC
); and the Company
will not directly or indirectly use the proceeds of this offering, or lend, contribute or otherwise
make available such proceeds to any subsidiary, joint venture partner or other person or entity,
for the purpose of financing the activities of any person currently subject to any U.S. sanctions
administered by OFAC.
(xxxviii)
Sarbanes Oxley Act Compliance
. The Company is in compliance in all material respects
with all provisions of the Sarbanes-Oxley Act of 2002 that are applicable to the Company as of the
date hereof.
(xxxix)
Statements in Prospectus
. The statements set forth in the Prospectus under the caption
Description of Capital Stock, insofar as they purport to constitute a summary of the terms of the
Shares, are accurate, complete and fair in all material respects.
(xl)
Directed Share Program
. The Company has not offered, or caused the Underwriters to
offer, any Offered Shares to any person pursuant to the Directed Share Program with the intent to
unlawfully influence (i) a customer or supplier of the Company
to alter the customers or suppliers level or type of
business with the Company or (ii) a trade journalist or publication to write or publish favorable
information about the Company or its products.
Any certificate signed by any officer of the Company or any of its subsidiaries and delivered
to the Representatives or to counsel for the Underwriters shall be deemed a representation and
warranty by the Company to each Underwriter as to the matters covered thereby.
The Company acknowledges that the Underwriters and, for purposes of the opinions to be
delivered pursuant to Section 6 hereof, counsel to the Company and counsel to the Underwriters,
will rely upon the accuracy and truthfulness of the foregoing representations and hereby consents
to such reliance.
B.
Representations and Warranties of the Selling Shareholders. Each Selling Shareholder represents, warrants and covenants, severally and not jointly, to
each Underwriter as follows:
14
(i)
The Underwriting Agreement
. This Agreement has been duly authorized, executed and delivered by or on behalf of such
Selling Shareholder.
(ii)
The Custody
Agreement and Power of Attorney
. Each of the (i) Custody
Agreement signed by such Selling Shareholder and Wells Fargo
Shareowner Services, as
custodian (the
Custodian
), relating to the deposit of the Offered Shares to be sold by such
Selling Shareholder (the
Custody Agreement
) and (ii) Power of Attorney appointing certain
individuals named therein as such Selling Shareholders attorneys-in-fact (each, an
Attorney-in-Fact
) to the extent set forth therein relating to the transactions contemplated
hereby and by the Prospectus (the
Power of Attorney
), of such Selling Shareholder has been duly
authorized, executed and delivered by such Selling Shareholder and is a valid and binding agreement
of such Selling Shareholder, enforceable in accordance with its terms, except as rights to
indemnification thereunder may be limited by applicable law and subject to the Enforceability
Exceptions.
(iii)
Lock-Up Agreements
. Such Selling Shareholder has duly executed and delivered to the Representatives a lock-up
agreement in the form attached as
Exhibit D
hereto; such lock-up agreement has been duly
authorized by such Selling Shareholder and is a valid and binding agreement of such Selling
Shareholder, enforceable in accordance with its terms, except as rights to indemnification
thereunder may be limited by applicable law and subject to the Enforceability Exceptions.
(iv)
Title to Offered Shares to be Sold
. Such Selling Shareholder has, and on the First Closing Date and each applicable Option
Closing Date will have, good and valid title to all of the Offered Shares which may be sold by such
Selling Shareholder pursuant to this Agreement on such date and the legal right and power to sell,
transfer and deliver all of the Offered Shares which may be sold by such Selling Shareholder
pursuant to this Agreement and to comply with its other obligations hereunder.
(v)
Delivery of the Offered Shares to be Sold
. Delivery of the Offered Shares which are sold by such Selling Shareholder pursuant to this
Agreement will pass good and valid title to such Offered Shares, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or other adverse claim.
(vi)
Non-Contravention; No Further Authorizations or Approvals Required.
The execution and delivery by such Selling Shareholder of, and the performance by such
Selling Shareholder of its obligations under, this Agreement, the Custody Agreement and the Power
of Attorney will not contravene or conflict with, result in a breach of, or constitute a Default
under, or require the consent of any other party to, (i) the charter or by-laws, partnership
agreement, trust agreement or other organizational documents of such Selling Shareholder, (ii) any
other agreement or instrument to which such Selling Shareholder is a party or by which it is bound
or under which it is entitled to any right or benefit, or (iii) any provision of applicable law or
any judgment, order, decree or regulation applicable to such Selling
15
Shareholder of any court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over such Selling Shareholder, except in the case of (ii) or (iii)
as would not, individually or in the aggregate, result in a Material Adverse Change. No consent,
approval, authorization or other order of, or registration or filing with, any court or other
governmental authority or agency, is required for the consummation by such Selling Shareholder of
the transactions contemplated in this Agreement, except for the registration of the Offered Shares
under the Securities Act and except for such consents, approvals and authorizations as have been
obtained or made and are in full force and effect under the Securities Act, applicable state
securities or blue sky laws and from FINRA.
(vii)
No Registration, Preemptive, Co-Sale or Other Similar Rights
. Such Selling Shareholder (i) does not have any registration or other similar rights to have
any equity or debt securities registered for sale by the Company under the Registration Statement
or included in the offering contemplated by this Agreement, except for such rights as are described
in the Time of Sale Prospectus under Shares Eligible for Future Sale, (ii) does not have any
preemptive right, co-sale right or right of first refusal or other similar right to purchase any of
the Company Shares or any of Offered Shares to be sold by any of the other Selling Shareholders to
the Underwriters pursuant to this Agreement, except for such rights as such Selling Shareholder has
waived prior to the date hereof and as have been described in the Registration Statement and Time
of Sale Prospectus, and (iii) does not own any warrants, options or similar rights to acquire, and
does not have any right or arrangement to acquire, any capital stock, right, warrants, options or
other securities from the Company, other than those described in the Registration Statement and the
Time of Sale Prospectus
.
(viii)
No Further Consents, etc.
Except for such consents, approvals and waivers which have been obtained by such Selling
Shareholder on or prior to the date of this Agreement, no consent, approval or waiver is required
under any instrument or agreement to which such Selling Shareholder is a party or by which it is
bound or under which it is entitled to any right or benefit, in connection with the offering, sale
or purchase by the Underwriters of any of the Offered Shares which may be sold by such Selling
Shareholder under this Agreement or the consummation by such Selling Shareholder of any of the
other transactions contemplated hereby.
(ix)
Disclosure Made by Such Selling Shareholder in the Prospectus.
All information furnished by or on behalf of such Selling Shareholder in writing expressly
for use in the Registration Statement and Time of Sale Prospectus is, and on the First Closing Date
and the applicable Option Closing Date will be, true, correct, and complete in all material
respects, and does not, and on the First Closing Date and the applicable Option Closing Date will
not, contain any untrue statement of a material fact or omit to state any material fact necessary
to make such information not misleading, it being understood and
agreed that the only such information furnished by or on behalf of
any Selling Shareholder consists of the description of such Selling
Shareholder and the number of Shares held by such Selling Shareholder
as described under the caption Principal and Selling
Shareholders in the Time of Sale Prospectus. Such Selling Shareholder confirms as accurate the number
of Shares set forth opposite such Selling Shareholders name in the Time of Sale Prospectus under
the caption Principal and Selling Shareholders (both prior to and after giving effect to the sale
of the Offered Shares).
(x)
No Requirement to Sell.
The sale of the Shares by such Selling Shareholder pursuant hereto
is not prompted solely by any material information concerning the Company or any of its
subsidiaries which is not set forth in the Time of Sale Prospectus and the Prospectus or any
amendment or supplement thereto.
16
(xi)
No Price Stabilization or Manipulation; Compliance with Regulation M
. Such Selling Shareholder has not taken, directly or indirectly, any action designed to or
that might be reasonably expected to cause or result in stabilization or manipulation of the price
of the Shares or any other reference security, whether to facilitate the sale or resale of the
Offered Shares or otherwise, and has taken no action which would directly or indirectly violate any
provision of Regulation M.
(xii)
No Transfer Taxes or Other Fees
. There are no transfer taxes or other similar fees or charges under Federal law or the laws
of any state, or any political subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the sale by the Selling Shareholders of the Offered
Shares.
(xiii)
Tax Forms.
In order to document the Underwriters compliance with the reporting and
withholding provisions with respect to the transactions contemplated herein, such Selling
Shareholder will deliver to you prior to or at the First Closing Date a properly completed and
executed Internal Revenue Service Form W-8 (together with any required attachments) or W-9 as may
be applicable (or other applicable form or statement specified by Treasury Department regulations
in lieu thereof).
(xiv)
FINRA.
Neither such Selling Shareholder nor any of its respective affiliates (as defined
pursuant to Rule 405 promulgated under the Securities Act), directly, or indirectly through one or
more intermediaries, control or are controlled by, or are under common control with any member firm
of FINRA or are a person associated with a member (within the meaning of the FINRA by-laws) of
FINRA.
(xv)
Distribution of Offering Materials by the Selling Shareholders
. Such Selling Shareholder has not distributed and will not distribute, prior to the latest
of (i) the expiration or termination of the option granted to the several Underwriters under
Section 2, (ii) the completion of the Underwriters distribution of the Offered Shares and (iii)
the expiration of 25 days after the date of the Prospectus, any offering material in connection
with the offering and sale of the Offered Shares other than a preliminary prospectus, the Time of
Sale Prospectus or the Registration Statement.
Any certificate signed by such Selling Shareholder and delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and warranty by such Selling
Shareholder to each Underwriter as to the matters covered thereby.
Such Selling Shareholder acknowledges that the Underwriters and, for purposes of the opinion
to be delivered pursuant to Section 6 hereof, counsel to such Selling Shareholder and counsel to
the Underwriters, will rely upon the accuracy and truthfulness of the foregoing representations and
hereby consents to such reliance.
Section 2. Purchase, Sale and Delivery of the Offered Shares
.
(a)
The Firm Shares
.
17
Upon the terms herein set forth, (i) the Company agrees to issue and sell to the several
Underwriters an aggregate of 5,000,000 Firm Shares and (ii) the Selling Shareholders agree to sell to
the several Underwriters an aggregate of 3,333,000 Firm Shares, with each Selling Shareholder selling
the number of Firm Shares set forth opposite such Selling Shareholders name on
Schedule B
.
On the basis of the representations, warranties and agreements herein contained, and upon the
terms but subject to the conditions herein set forth, the Underwriters agree, severally and not
jointly, to purchase from the Company and the Selling Shareholders the respective number of Firm
Shares set forth opposite their names on
Schedule A
. The purchase price per Firm Share to
be paid by the several Underwriters to the Company and the Selling Shareholders shall be $[___] per
share.
(b)
The First Closing Date
. Delivery of certificates for the Firm Shares to be purchased by the Underwriters and
payment therefor shall be made at the offices of Latham & Watkins LLP, 885 Third Avenue, New York,
New York 10022 (or such other place as may be agreed to by the Company and the Representatives) at
9:00 a.m. New York time, on [___], 2010, or such other time and date not later than 1:30 p.m. New
York time, on [___], 2010 as the Representatives shall designate by notice to the Company and shall
not be earlier than one nor later than three full business days after delivery of such notice (the
time and date of such closing are called the
First Closing Date
). The Company and the Selling
Shareholders hereby acknowledge that circumstances under which the Representatives may provide
notice to postpone the First Closing Date as originally scheduled include, but are in no way
limited to, any determination by the Company, the Selling Shareholders or the Representatives to
recirculate to the public copies of an amended or supplemented Prospectus or a delay as
contemplated by the provisions of Section 11.
(c)
The Optional Shares; Option Closing Date
. In addition, on the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set forth, the Selling
Shareholders hereby grant an option to the several Underwriters to purchase, severally and not
jointly, up to an aggregate of 1,249,950 Optional Shares from the Selling Shareholders at the purchase
price per share to be paid by the Underwriters for the Firm Shares. The option granted hereunder
is for use by the Underwriters solely in covering any over-allotments in connection with the sale
and distribution of the Firm Shares. The option granted hereunder may be exercised at any time and
from time to time in whole or in part upon notice by the Representatives to each Selling
Shareholder (with a copy to the Company), which notice may be given at any time within 30 days from
the date of this Agreement. Such notice shall set forth (i) the aggregate number of Optional
Shares as to which the Underwriters are exercising the option, (ii) the names and denominations in
which the certificates for the Optional Shares are to be registered and (iii) the time, date and
place at which such certificates will be delivered (which time and date may be simultaneous with,
but not earlier than, the First Closing Date; and in the event that such time and date are
simultaneous with the First Closing Date, the term
First Closing Date
shall refer to the time and
date of delivery of certificates for the Firm Shares and such Optional Shares). Any such time and
date of delivery, if subsequent to the First Closing Date, is called an
Option Closing Date
and
shall be determined by the Representatives and shall not be earlier than three nor later than five
full business days after delivery of such notice of exercise. If any Optional Shares are to be
purchased, (a) each Underwriter agrees, severally and not jointly, to purchase the number of
Optional Shares (subject to such adjustments to eliminate fractional shares as the Representatives
may determine) that bears the same proportion to the total number of Optional Shares to be
purchased as the number of Firm Shares set forth on
Schedule A
opposite the name of such
18
Underwriter bears to the total number of Firm Shares and (b) each Selling Shareholder agrees,
severally and not jointly, to sell the number of Optional Shares (subject to such adjustments to
eliminate fractional shares as the Representatives may determine) that bears the same proportion to
the total number of Optional Shares to be sold as the number of Optional Shares set forth in
Schedule B
opposite the name of such Selling Shareholder bears to the total number of
Optional Shares. The Representatives may cancel the option at any time prior to its expiration by
giving written notice of such cancellation to each Selling Shareholder (with a copy to the
Company).
(d)
Public Offering of the Offered Shares
. The Representatives hereby advise the Company and the Selling Shareholders that the
Underwriters intend to offer for sale to the public, initially on the terms set forth in the Time
of Sale Prospectus and the Prospectus, their respective portions of the Offered Shares as soon
after this Agreement has been executed and the Registration Statement has been declared effective
as the Representatives, in their sole judgment, have determined is advisable and practicable.
(e)
Payment for the Offered Shares
. Payment for the Company Shares shall be made at the First Closing Date by wire transfer of
immediately available funds to the order of the Company. Payment for the Offered Shares to be sold
by the Selling Shareholders shall be made at the First Closing Date (and, if applicable, at each
Option Closing Date) by wire transfer of immediately available funds to the order of the Custodian.
It is understood that the Representatives have been authorized, for each of their own accounts
and the accounts of the several Underwriters, to accept delivery of and receipt for, and make
payment of the purchase price for, the Firm Shares and any Optional Shares the Underwriters have
agreed to purchase. Jefferies, Piper Jaffray and Wells Fargo, each individually and not as the
Representatives of the Underwriters, may (but shall not be obligated to) make payment for any
Offered Shares to be purchased by any Underwriter whose funds shall not have been received by the
Representatives by the First Closing Date or the applicable Option Closing Date, as the case may
be, for the account of such Underwriter, but any such payment shall not relieve such Underwriter
from any of its obligations under this Agreement.
Each Selling Shareholder hereby agrees that (i) it will pay all stock transfer taxes, stamp
duties and other similar taxes, if any, payable upon the sale or delivery of the Offered Shares to
be sold by such Selling Shareholder to the several Underwriters, or otherwise in connection with
the performance of such Selling Shareholders obligations hereunder and (ii) the Custodian is
authorized to deduct for such payment any such amounts from the proceeds to such Selling
Shareholder hereunder and to hold such amounts for the account of such Selling Shareholder with the
Custodian under the Custody Agreement.
(f)
Delivery of the Offered Shares
. The Company and the Selling Shareholders shall deliver, or cause to be delivered, to
the Representatives for the accounts of the several Underwriters, through the facilities of DTC and
for the account of the several Underwriters, certificates for the Firm Shares to be sold by the
Underwriters at the First Closing Date, against the irrevocable release of a wire transfer of
immediately available funds for the amount of the purchase price therefor. The Selling
Shareholders shall also deliver, or cause to be delivered, to the Representatives for the accounts
19
of the several Underwriters, through the facilities of DTC and for the account of the several
Underwriters, certificates for the Optional Shares the Underwriters have agreed to purchase from
the Selling Shareholders at the First Closing Date or the applicable Option Closing Date, as the
case may be, against the irrevocable release of a wire transfer of immediately available funds for
the amount of the purchase price therefor. The certificates for the Offered Shares shall be
registered in such names or names and in such denominations as the Representatives may request and
shall be made available for inspection on the business day preceding the First Closing Date (or the
applicable Option Closing Date, as the case may be) at a location in New York City as the
Representatives may designate.
Section 3. Additional Covenants of the Company.
(A)
Covenants of the Company
. The Company further covenants and agrees with each Underwriter as follows:
(i)
Delivery of Registration Statement, Time of Sale Prospectus and Prospectus.
The
Company shall furnish to you, without charge, as many copies of the Registration Statement,
any amendments thereto and any Rule 462(b) Registration Statement (including exhibits
thereto) as you may reasonably request and for delivery to each other Underwriter a
conformed copy of the Registration Statement, any amendments thereto and any Rule 462(b)
Registration Statement (without exhibits thereto) and shall furnish to you in New York
City, without charge, prior to 10:00 a.m. New York City time on the business day next
succeeding the date of this Agreement and during the period mentioned in Section 3(A)(v) or
3(A)(vi) below, as many copies of the Time of Sale Prospectus, the Prospectus and any
supplements and amendments thereto or to the Registration Statement as you may reasonably
request.
(ii)
Representatives Review of Proposed Amendments and Supplements.
Prior to
amending or supplementing the Registration Statement (including any registration statement
filed under Rule 462(b) promulgated under the Securities Act), any preliminary prospectus,
the Time of Sale Prospectus or the Prospectus, the Company shall furnish to the
Representatives for review, a reasonable amount of time prior to the proposed time of
filing or use thereof, a copy of each such proposed amendment or supplement, and the
Company shall not file or use any such proposed amendment or supplement without the
Representatives consent, and to file with the Commission within the applicable period
specified in Rule 424(b) promulgated under the Securities Act any prospectus required to be
filed pursuant to such Rule.
(iii)
Free Writing Prospectuses.
The Company shall furnish to the Representatives for
review, a reasonable amount of time prior to the proposed time of filing or use thereof, a
copy of each proposed free writing prospectus or any amendment or supplement thereto to be
prepared by or on behalf of, used by, or referred to by the Company, and the Company shall
not file, use or refer to any proposed free writing prospectus or any amendment or
supplement thereto without the Representatives consent. The Company shall furnish to each
Underwriter, without charge, as many copies of any free writing prospectus prepared by or
on behalf of, or used by the Company, as such Underwriter may reasonably request. If at
any time when a prospectus
20
is required by the Securities Act (including, without limitation, pursuant to
Rule 173(d) promulgated thereunder) to be delivered in connection with sales of the Offered
Shares (but in any event if at any time through and including the First Closing Date) there
occurred or occurs an event or development as a result of which any free writing prospectus
prepared by or on behalf of, used by, or referred to by the Company conflicted or would
conflict with the information contained in the Registration Statement or included or would
include an untrue statement of a material fact or omitted or would omit to state a material
fact necessary in order to make the statements therein, in the light of the circumstances
prevailing at that subsequent time, not misleading, the Company shall promptly amend or
supplement such free writing prospectus to eliminate or correct such conflict or so that
the statements in such free writing prospectus as so amended or supplemented will not
include an untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances prevailing at
such subsequent time, not misleading, as the case may be;
provided
,
however
, that prior to
amending or supplementing any such free writing prospectus, the Company shall furnish to
the Representatives for review, a reasonable amount of time prior to the proposed time of
filing or use thereof, a copy of such proposed amended or supplemented free writing
prospectus, and the Company shall not file, use or refer to any such amended or
supplemented free writing prospectus without the Representatives consent.
(iv)
Filing of Underwriter Free Writing Prospectuses.
The Company shall not take any
action that would result in an Underwriter or the Company being required to file with the
Commission pursuant to Rule 433(d) promulgated under the Securities Act a free writing
prospectus prepared by or on behalf of the Underwriter that the Underwriter otherwise would
not have been required to file thereunder.
(v)
Amendments and Supplements to Time of Sale Prospectus.
If the Time of Sale
Prospectus is being used to solicit offers to buy the Shares at a time when the Prospectus
is not yet available to prospective purchasers and any event shall occur or condition exist
as a result of which it is necessary to amend or supplement the Time of Sale Prospectus so
that the Time of Sale Prospectus does not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein, in the
light of the circumstances when delivered to a prospective purchaser, not misleading, or if
any event shall occur or condition exist as a result of which the Time of Sale Prospectus
conflicts with the information contained in the Registration Statement, or if, in the
opinion of counsel for the Underwriters, it is necessary to amend or supplement the Time of
Sale Prospectus to comply with applicable law, including the Securities Act, the Company
shall (subject to Sections 3(A)(ii) and 3(A)(iii)) prepare, file with the Commission and
furnish, at its own expense, to the Underwriters and to any dealer upon request, either
amendments or supplements to the Time of Sale Prospectus so that the statements in the Time
of Sale Prospectus as so amended or supplemented will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances when delivered to a prospective purchaser, not
misleading or so that the Time of Sale Prospectus, as amended or supplemented, will no
longer conflict with the Registration Statement, or so that the Time of Sale Prospectus, as
amended or supplemented, will comply with applicable law including the Securities Act.
(vi)
Securities Act Compliance
. After the date of this Agreement and until such time
as the Underwriters are no longer required to deliver a Prospectus in order to
21
confirm sales of the Offered Shares, the Company shall promptly advise the
Representatives in writing (i) of the receipt of any comments of, or requests for
additional or supplemental information from, the Commission, (ii) of the time and date of
any filing of any post-effective amendment to the Registration Statement, any Rule 462(b)
Registration Statement or any amendment or supplement to any Preliminary Prospectus, the
Time of Sale Prospectus, any free writing prospectus or the Prospectus, (iii) of the time
and date that any post-effective amendment to the Registration Statement or any Rule 462(b)
Registration Statement becomes effective and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or any post-effective
amendment thereto, any Rule 462(b) Registration Statement or any amendment or supplement to
any Preliminary Prospectus, the Time of Sale Prospectus or the Prospectus or of any order
preventing or suspending the use of any preliminary prospectus, the Time of Sale
Prospectus, any free writing prospectus or the Prospectus, or of any proceedings to remove,
suspend or terminate from listing or quotation the Shares from any securities exchange upon
which they are listed for trading or included or designated for quotation, or of the
threatening or initiation of any proceedings for any of such purposes. If the Commission
shall enter any such stop order at any time, the Company will use its best efforts to
obtain the lifting of such order at the earliest possible time. Additionally, the Company
agrees that it shall comply with the provisions of Rule 424(b), Rule 433 and Rule 430A, as
applicable, promulgated under the Securities Act and will use its reasonable efforts to
confirm that any filings made by the Company under Rule 424(b) or Rule 433 were received in
a timely manner by the Commission.
(vii)
Amendments and Supplements to the Prospectus and Other Securities Act Matters.
If any event shall occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus so that the Prospectus does not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing when the Prospectus is delivered to a
purchaser, not misleading, or if in the opinion of counsel for the Underwriters it is
otherwise necessary to amend or supplement the Prospectus to comply with applicable law,
including the Securities Act, the Company agrees (subject to Sections 3(A)(ii) and
3(A)(iii)) to promptly prepare, file with the Commission and furnish at its own expense to
the Underwriters and to dealers, amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not include an untrue
statement of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances existing when the Prospectus is
delivered to a purchaser, not misleading or so that the Prospectus, as amended or
supplemented, will comply with applicable law including the Securities Act. Neither the
Representatives consent to, or delivery of, any such amendment or supplement shall
constitute a waiver of any of the Companys obligations under Sections 3(A)(ii) and
3(A)(iii).
(viii)
Blue Sky Compliance
. The Company shall cooperate with the Representatives and
counsel for the Underwriters to qualify or register the Offered Shares for sale under (or
obtain exemptions from the application of) the state securities or blue sky laws or
Canadian provincial securities laws of those jurisdictions designated by the
Representatives, shall comply with such laws and shall continue such qualifications,
registrations and exemptions in effect so long as required for the distribution of the
Offered Shares. The Company shall not be required to qualify as a foreign corporation or
to take any action that would subject it to general service of process in any such
jurisdiction where it is not presently qualified or where it would be subject to taxation
as
22
a foreign corporation or make any change to its articles of incorporation or
regulations. The Company will advise the Representatives promptly of the suspension of the
qualification or registration of (or any such exemption relating to) the Offered Shares for
offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding
for any such purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, the Company shall use its best efforts to obtain
the withdrawal thereof at the earliest possible time.
(ix)
Use of Proceeds
. The Company shall apply the net proceeds from the sale of the
Company Shares in the manner described under the caption Use of Proceeds in each
Applicable Prospectus.
(x)
Transfer Agent
. The Company shall engage and maintain, at its expense, a
registrar and transfer agent for the Shares.
(xi)
Earnings Statement
. As soon as practicable, but in any event no later than
sixteen (16) months after the date of this Agreement, the Company will make generally
available to its security holders and to the Representatives an earnings statement (which
need not be audited) covering a period of at least twelve months beginning with the first
fiscal quarter of the Company occurring after the date of this Agreement which shall
satisfy the provisions of Section 11(a) of the Securities Act and the rules and regulations
of the Commission promulgated thereunder.
(xii)
Periodic Reporting Obligations
. Until such time as the Underwriters are no
longer required to deliver a Prospectus in order to confirm sales of the Offered Shares,
the Company shall file, on a timely basis, with the Commission and the Nasdaq Global Market
all reports and documents required to be filed under the Exchange Act. Additionally, the
Company shall report the use of proceeds from the issuance of the Offered Shares as may be
required under Rule 463 promulgated under the Securities Act.
(xiii)
Listing
. The Company will use its best efforts to effect and maintain the
inclusion and quotation of the Offered Shares on the Nasdaq Global Market and to maintain
the inclusion and quotation of the Shares on the Nasdaq Global Market.
(xiv)
Company to Provide Copy of the Prospectus in Form That May be Downloaded from
the Internet
. The Company shall cause to be prepared and delivered, at its expense, within
one business day from the effective date of this Agreement, to the Representatives an
electronic Prospectus
to be used by the Underwriters in connection with the offering and
sale of the Offered Shares. As used herein, the term
electronic Prospectus
means a form
of Time of Sale Prospectus, and any amendment or supplement thereto, that meets each of the
following conditions: (i) it shall be encoded in an electronic format, satisfactory to the
Representatives, that may be transmitted electronically by the Representatives and the
other Underwriters to offerees and purchasers of the Offered Shares; (ii) it shall disclose
the same information as the paper Time of Sale Prospectus, except to the extent that
graphic and image material cannot be disseminated electronically, in which case such
graphic and image material shall be replaced in the electronic Prospectus with a fair and
accurate narrative description or tabular representation of such material, as appropriate;
and (iii) it shall be in or convertible into a paper format or an electronic format,
satisfactory to the Representatives, that will allow investors to store and have
continuously ready access to the Time of Sale Prospectus at any future time, without charge
to investors (other than
23
any fee charged for subscription to the Internet as a whole and for on-line time).
The Company hereby confirms that it has included or will include in the Prospectus filed
pursuant to EDGAR or otherwise with the Commission and in the Registration Statement at the
time it is declared effective an undertaking that, upon receipt of a request by an investor
or his or her representative, the Company shall transmit or cause to be transmitted
promptly, without charge, a paper copy of the Time of Sale Prospectus.
(xv)
Agreement Not to Offer or Sell Additional Shares
. During the period commencing
on and including the date hereof and ending on and including the 180
th
day
following the date hereof (as the same may be extended as described below, the
Lock-up
Period
), the Company will not, without the prior written consent of Jefferies and Piper
Jaffray (which consent may be withheld at the sole discretion of Jefferies and Piper
Jaffray), directly or indirectly, sell (including, without limitation, any short sale),
offer, contract or grant any option to sell, pledge, transfer or establish an open put
equivalent position within the meaning of Rule 16a-1(h) promulgated under the Exchange
Act, or otherwise dispose of or transfer, or announce the offering of, or file any
registration statement (except for a registration statement on Form S-8) under the
Securities Act in respect of, any Shares, options, rights or warrants to acquire Shares or
securities exchangeable or exercisable for or convertible into Shares (other than as
contemplated by this Agreement with respect to the Offered Shares) or publicly announce the
intention to do any of the foregoing;
provided
,
however
, that the Company may issue Shares
or options to purchase Shares, or issue Shares upon exercise of options, pursuant to any
stock option, stock bonus or other stock plan or arrangement existing on the date of this
Agreement and described in each Applicable Prospectus, but only if the holders of such shares, options, or shares issued upon exercise of such options, agree in writing not to
sell, offer, dispose of or otherwise transfer any such shares or options during such
Lock-up Period without the prior written consent of Jefferies and Piper Jaffray (which
consent may be withheld at the sole discretion of Jefferies and Piper Jaffray).
Notwithstanding the foregoing, if (i) during the last 17 days of the Lock-up Period, the
Company issues an earnings release or material news or a material event relating to the
Company occurs or (ii) prior to the expiration of the Lock-up Period, the Company announces
that it will release earnings results during the 16-day period beginning on the last day of
the Lock-up Period, then in each case the Lock-up Period will be extended until the
expiration of the 18-day period beginning on the date of the issuance of the earnings
release or the occurrence of the material news or material event, as applicable, unless
Jefferies and Piper Jaffray waive, in writing, such extension (which waiver may be withheld
at the sole discretion of Jefferies and Piper Jaffray). The Company will provide Jefferies
and Piper Jaffray with prior notice of any such announcement that gives rise to an
extension of the Lock-up Period.
(xvi)
Future Reports to Shareholders.
During a period of three years from the
effective date of the Registration Statement, the Company shall furnish to its shareholders
(which may be satisfied by filing with the Commissions EDGAR system) as soon as
practicable after the end of each fiscal year an annual report (including a balance sheet
and statements of income, stockholders equity and cash flows of the Company and its
consolidated subsidiaries certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of each fiscal year
(beginning with the fiscal quarter ending after the effective date of the Registration
Statement), to make available to its shareholders (which may be satisfied by filing with
the Commissions EDGAR system) consolidated summary financial information of the Company
and its subsidiaries for such quarter in reasonable detail.
24
(xvii)
Future Reports to Representatives.
During a period of three years from the
effective date of the Registration Statement, the Company shall furnish to the
Representatives copies of all reports or other communications (financial or other)
furnished generally to shareholders that have not otherwise been filed with the
Commissions EDGAR system, and to deliver the Representatives promptly after they are
available, copies of any reports and financial statements that have not otherwise been
filed with the Commissions EDGAR system furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the Company is listed.
(xviii)
Investment Limitation
. The Company shall not invest, or otherwise use the
proceeds received by the Company from its sale of the Company Shares in such a manner as
would require the Company or any of its subsidiaries to register as an investment company
under the Investment Company Act.
(xix)
No Stabilization or Manipulation; Compliance with Regulation M
. The Company
will not take, directly or indirectly, any action designed to or that might be reasonably
expected to cause or result in stabilization or manipulation of the price of the Shares or
any other reference security, whether to facilitate the sale or resale of the Offered
Shares or otherwise, and the Company will, and shall cause each of its controlled
affiliates to, comply with all applicable provisions of Regulation M. If the limitations
of Rule 102 of Regulation M (
Rule 102
) do not apply with respect to the Offered Shares or
any other reference security pursuant to any exception set forth in Section (d) of Rule
102, then promptly upon notice from the Representatives (or, if later, at the time stated
in the notice), the Company will, and shall cause each of its controlled affiliates to,
comply with Rule 102 as though such exception were not available but the other provisions
of Rule 102 (as interpreted by the Commission) did apply.
(xx)
Existing Lock-Up Agreements
. During the Lock-Up Period, the Company will enforce
all existing agreements between the Company and any of its security holders that prohibit
the sale, transfer, assignment, pledge or hypothecation of any of the Companys securities
in connection with the Companys initial public offering. In addition, the Company will
direct the transfer agent to place stop transfer restrictions upon any such securities of
the Company that are bound by such existing lock-up agreements for the duration of the
periods contemplated in such agreements, including, without limitation, lock-up
agreements entered into by the Companys officers and directors pursuant to Section 6(m).
(xxi)
Directed Share Program
. In connection with the Directed Share Program, the Company
will ensure that the Directed Shares will be restricted to the extent required by FINRA or the
FINRA or NASD rules, as applicable, from sale, transfer, assignment, pledge or hypothecation for a
period of three months following the date of the effectiveness of the Registration Statement.
Jefferies will notify the Company as to which Participants will need to be so restricted. The
Company will direct the transfer agent to place stop transfer restrictions upon such securities for
such period of time. Should the Company release, or seek to release, from such restrictions any of
the Directed Shares, the Company agrees to reimburse the Underwriters for any reasonable expenses
(including, without limitation, legal expenses) they incur in connection with such release.
(B)
Covenants of the Selling Shareholders
. Each Selling Shareholder, severally and not jointly, further covenants and agrees with each
Underwriter:
(i)
Agreement Not to Offer or Sell Additional Shares
. Such Selling Shareholder will
not, without the prior written consent of the Representatives (which consent may be
withheld in their sole discretion), directly or indirectly, sell, offer, contract or grant
any option to sell (including without limitation any short sale), pledge, transfer,
establish an open put equivalent position within the meaning of Rule 16a-1(h) promulgated
under the Exchange Act, or otherwise dispose of any Shares, options or warrants to acquire
Shares, or securities exchangeable or exercisable for or convertible into Shares currently
or hereafter owned either of record or beneficially (as defined in
25
Rule 13d-3 promulgated under the Exchange Act) by such Selling Shareholder, or
publicly announce the such Selling Shareholders intention to do any of the foregoing, for
a period commencing on the date hereof and continuing through the close of trading on the
last day of the Lock-up Period. However, the foregoing restrictions shall not apply to (i)
transactions relating to Shares or other securities of the Company acquired in open market
transactions after the First Closing Date or (ii)a distribution of shares to limited
partners or shareholders of such Selling Shareholder; provided, however, that, in the case
of (ii) above, it shall be a condition to such transfer that the transferee executes and
delivers to the Representatives a lock-up agreement in the form attached as
Exhibit
D
.
(ii)
No Stabilization or Manipulation; Compliance with Regulation M
. Such Selling
Shareholder will not take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of the price of the
Shares or any other reference security, whether to facilitate the sale or resale of the
Offered Shares or otherwise, and such Selling Shareholder will, and shall cause each of its
controlled affiliates to, comply with all applicable provisions of Regulation M. If the
limitations of Rule 102 do not apply with respect to the Offered Shares or any other
reference security pursuant to any exception set forth in Section (d) of Rule 102, then
promptly upon notice from the Representatives (or, if later, at the time stated in the
notice), such Selling Shareholder will, and shall cause each of its controlled affiliates
to, comply with Rule 102 as though such exception were not available but the other
provisions of Rule 102 (as interpreted by the Commission) did apply.
(iii)
Delivery of Forms W-8 and W-9
. To deliver to the Representatives prior to the
First Closing Date a properly completed and executed United States Treasury Department Form
W-8 (if the Selling Shareholder is a non-United States person), together with any required
attachments applicable to such Selling Shareholder or Form W-9 (if the Selling Shareholder
is a United States Person).
Section 4. Payment of Expenses
. The Representatives, on behalf of the several Underwriters, may, in their sole discretion,
waive in writing the performance by the Company or any Selling Shareholder of any one or more of
the foregoing covenants or extend the time for their performance.
(a) Payment of expenses by the Company
. The Company agrees to pay all costs, fees and expenses incurred in connection with the
performance of its obligations hereunder and in connection with the transactions contemplated
hereby, including without limitation (i) all expenses incident to the issuance and delivery of the
Company Shares (including all printing and engraving costs), (ii) all fees and expenses of the
registrar and transfer agent of the Shares, (iii) all necessary issue, transfer and other stamp
taxes in connection with the issuance and sale of the Offered Shares to the Underwriters, (iv) all
fees and expenses of the Companys counsel, independent public or certified public accountants and
other advisors, (v) all costs and expenses incurred in connection with the preparation, printing,
filing, shipping and distribution of the Registration Statement (including financial statements,
exhibits, schedules, consents and certificates of experts), the Time of Sale Prospectus, the
Prospectus, any free writing prospectus prepared by or on behalf of, used by, or referred to by the
Company, and each preliminary prospectus, and all amendments and supplements thereto, and this
Agreement, (vi) all filing fees, reasonable and properly documented attorneys fees and expenses
incurred by the Company or the Underwriters in connection with qualifying or
26
registering (or obtaining exemptions from the qualification or registration of) all or any
part of the Offered Shares for offer and sale under the state securities or blue sky laws or the
provincial securities laws of Canada, and, if requested by the Representatives, preparing and
printing a Blue Sky Survey or memorandum and a Canadian wrapper, and any supplements thereto,
advising the Underwriters of such qualifications, registrations and exemptions, (vii) the filing
fees incident to, and the reasonable and properly documented fees and expenses of counsel for the
Underwriters in connection with, FINRAs review, if any, and approval of the Underwriters
participation in the offering and distribution of the Offered Shares, (viii) the costs and expenses
of the Company relating to investor presentations on any road show undertaken in connection with
the marketing of the offering of the Shares, including, without limitation, expenses associated
with the preparation or dissemination of any electronic road show, expenses associated with the
production of road show slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of the Company, reasonable and
properly documented travel and lodging expenses of the representatives, employees and officers of
the Company, and one-half of any aircraft chartered by the Company in connection with the road
show,
provided
that the prior approval of the Company was obtained prior to the chartering of any
such aircraft, (ix) the fees and expenses associated with including the Offered Shares on the
Nasdaq Global Market, (x) all other fees, costs and expenses of the nature referred to in Item 13
of Part II of the Registration Statement and (xi) all costs and
expenses of the Underwriters, including the fees and disbursements of
counsel for the Underwriters, in connection with matters related to
the Directed Shares which are designated by the Company for sale to
Participants;
provided
, that
the fees and expenses payable by the Company to counsel for the Underwriters pursuant to clauses
(vi) and (vii) above shall not exceed in the aggregate $20,000. Except as provided in this
Section 4, Section 7, Section 9 and Section 10 hereof, the Underwriters shall pay their own
expenses, including the fees and disbursements of their counsel.
(b) Payment of expenses by the Selling Shareholders
. The Selling Shareholders further agree with each Underwriter to pay (directly or by
reimbursement) all fees and expenses incident to the performance of their obligations under this
Agreement which are not otherwise specifically provided for herein, including but not limited to
(i) fees and expenses of counsel and other advisors for such Selling Shareholders, (ii) fees and
expenses of the Custodian and (iii) expenses and taxes incident to
the sale and delivery of the Offered Shares to be sold by such Selling Shareholders to the
Underwriters hereunder (which taxes, if any, may be deducted by the Custodian under the provisions
of Section 2(e) of this Agreement).
This Section 4 shall not affect or modify any separate, valid agreement relating to the allocation
of payment of expenses between the Company, on the one hand, and the Selling Shareholders, on the
other hand.
Section 5. Covenant of the Underwriters.
Each Underwriter severally and not jointly,
covenants with the Company not to take any action that would result in the Company being required
to file with the Commission pursuant to Rule 433(d) promulgated under the Securities Act a free
writing prospectus prepared by or on behalf of such Underwriter that otherwise would not be
required to be filed by the Company thereunder, but for the action of the Underwriter.
Section 6. Conditions of the Obligations of the Underwriters.
The obligations of the several
Underwriters to purchase and pay for the Offered Shares as provided herein on the First Closing
Date and, with respect to the Optional Shares, each Option Closing Date, shall be subject to the
accuracy of the representations and warranties on the part of the Company and the Selling
Shareholders set forth in Sections 1(A) and 1(B) hereof as of the date hereof and as of the
27
First Closing Date as though then made and, with respect to the Optional Shares, as of each
Option Closing Date as though then made, to the timely performance by the Company and the Selling
Shareholders of their respective covenants and other obligations hereunder, and to each of the
following additional conditions:
(a)
Accountants Comfort Letter.
On the date hereof, the Representatives shall have received
from Deloitte & Touche LLP, independent public or certified public accountants for the Company, a
letter dated the date hereof addressed to the Underwriters, in form and substance satisfactory to
the Representatives, (i) containing statements and information of the type ordinarily included in
accountants comfort letters to underwriters, delivered according to Statement of Auditing
Standards No. 72 (or any successor bulletin), with respect to the audited and unaudited financial
statements and certain financial information contained in the Registration Statement, the
Preliminary Prospectus, Time of Sale Prospectus, and each free writing prospectus, if any, and,
with respect to each letter dated the date hereof only, the Prospectus (and the Representatives
shall have received an additional four conformed copies of such accountants letter for each of the
several Underwriters), and (ii) confirming that they are (A) independent public or certified public
accountants as required by the Securities Act and (B) in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X.
(b)
Chief Financial Officers Certificate.
On the date hereof, the Representatives shall have
received from the Companys Chief Financial Officer a certificate with respect to certain financial
information contained in the Registration Statement, the Preliminary Prospectus, Time of Sale
Prospectus, and each free writing prospectus, if any, and the Prospectus, in form and substance
reasonably satisfactory to the Representatives.
(c)
Compliance with Registration Requirements; No Stop Order; No Objection from FINRA.
For
the period from and after effectiveness of this Agreement and prior to the First Closing Date and,
with respect to the Optional Shares, each Option Closing Date:
(i) the Company shall have filed the Prospectus with the Commission (including the
information required by Rule 430A promulgated under the Securities Act) in the manner and
within the time period required by Rule 424(b) promulgated under the Securities Act; or the
Company shall have filed a post-effective amendment to the Registration Statement
containing the information required by such Rule 430A, and such post-effective amendment
shall have become effective;
(ii) no stop order suspending the effectiveness of the Registration Statement, any
Rule 462(b) Registration Statement, or any post-effective amendment to the Registration
Statement, shall be in effect and no proceedings for such purpose shall have been
instituted or threatened by the Commission; and
(iii) FINRA shall have raised no objection to the fairness and reasonableness of the
underwriting terms and arrangements.
(d)
No Material Adverse Change or Ratings Agency Change.
For the period from and after the
date of this Agreement and through and including the First Closing Date and, with respect to the
Optional Shares, each Option Closing Date:
(i) in the reasonable judgment of the Representatives there shall not have occurred
any Material Adverse Change; and
28
(ii) there shall not have occurred any downgrading, nor shall any notice have been
given of any intended or potential downgrading or of any review for a possible change that
does not indicate the direction of the possible change, in the rating accorded any
securities of the Company or any of its subsidiaries by any nationally recognized
statistical rating organization as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act.
(e)
Opinion of Counsel for the Company.
On each of the First Closing Date and each Option
Closing Date, the Representatives shall have received the opinion and negative assurance letter of
Dechert LLP, counsel for the Company, and Vorys, Sater, Seymour and Pease LLP, counsel for the
Company in the State of Ohio, each dated as of such Closing Date, the form of which is attached as
Exhibit A-1
and
Exhibit A-2,
respectively, to such further effect as counsel for
the Underwriters shall reasonably request (and the Representatives shall have received an
additional four signed copies of such counsels legal opinion for each of the several
Underwriters).
(f)
Listing.
The Shares to be sold at the First Closing Date and/or each Option Closing Date,
as applicable, shall have been duly approved for inclusion on the Nasdaq Global Market.
(g)
Opinion of Counsel for the Underwriters.
On each of the First Closing Date and each
Option Closing Date the Representatives shall have received the opinion and negative assurance
letter of Latham & Watkins LLP, counsel for the Underwriters, each in form and substance
satisfactory to the Underwriters, dated as of such Closing Date.
(h)
Officers Certificate.
On each of the First Closing Date and each Option Closing Date the
Representatives shall have received a written certificate executed by the Chief Executive Officer
of the Company and the Chief Financial Officer of the Company, dated as of such Closing Date, to
the effect set forth in subsections (c)(ii) and (c)(iii) of this Section 6, and further to the
effect that:
(i) for the period from and including the date of this Agreement through and including
such Closing Date, there has not occurred any Material Adverse Change;
(ii) the representations, warranties and covenants of the Company set forth in
Section 1(A) of this Agreement are true and correct with the same force and effect as
though expressly made on and as of such Closing Date; and
(iii) the Company has complied in all material respects with all the agreements
hereunder and satisfied all the conditions on its part to be performed or satisfied
hereunder at or prior to such Closing Date.
(i)
Bring-down Comfort Letter.
On each of the First Closing Date and each Option Closing Date
the Representatives shall have received from Deloitte & Touche LLP, independent public or certified
public accountants for the Company, a letter dated such date, in form and substance satisfactory to
the Representatives, to the effect that they reaffirm the statements made in the letter furnished
by them pursuant to subsection (a) of this Section 6, except that the specified date referred to
therein for the carrying out of procedures shall be no more than three business days prior to the
First Closing Date or the applicable Option Closing Date, as the case may be (and the
Representatives shall have received an additional four conformed copies of such accountants letter
for each of the several Underwriters).
29
(j)
Opinion
of Counsel for the Selling Shareholders.
On each of the First Closing Date and
each Option Closing Date the Representatives shall have received the
opinion of each of (i) Dechert, LLP,
counsel for
Bruckmann, Rosser, Sherill & Co. II L.P., (ii) Schulte Roth & Zabel LLP,
counsel for CHBravo Holding I LLC, and (iii) Proskauer Rose LLP, counsel for Golub Capital Partners IV, L.P.
and Golub Capital Convestment L.P., in each case, dated as of such Closing Date, the form of which is attached
as
Exhibit B-1
,
Exhibit B-2
and
Exhibit B-3
,
respectively, and to such further effect as counsel for the Underwriters shall reasonably
request (and the Representatives shall have received an additional
four conformed copies of each such
counsels legal opinion for each of the several Underwriters).
(k)
Selling Shareholders Certificate.
On each of the First Closing Date and each Option
Closing Date the Representatives shall have received a written certificate executed by each Selling
Shareholder, dated as of such Closing Date, to the effect that:
(i) the representations, warranties and covenants of such Selling Shareholder set
forth in Section 1(B) of this Agreement are true and correct with the same force and effect
as though expressly made by such Selling Shareholder on and as of such Closing Date; and
(ii) such Selling Shareholder has complied in all material respects with all the
agreements and satisfied all the conditions on its part to be performed or satisfied at or
prior to such Closing Date.
(l)
Selling Shareholders Documents.
On the date hereof, the Company and the Selling
Shareholders shall have furnished for review by the Representatives copies of the Powers of
Attorney and Custody Agreements executed by each of the Selling Shareholders and such further
information, certificates and documents as the Representatives may reasonably request.
(m)
Lock-Up Agreement from Certain Securityholders of the Company.
On or prior to the date
hereof, the Company shall have furnished to the Representatives an agreement in the form of
Exhibit D
hereto from the persons listed on
Exhibit C
hereto, representing each
director, executive officer and each beneficial owner (as defined and determined according to Rule
13d-3 promulgated under the Exchange Act, except that a one hundred eighty day period shall be used
rather than the sixty day period set forth therein) of one or more percent of the outstanding
issued share capital of the Company, and such agreements shall be in full force and effect on each
of the First Closing Date and each Option Closing Date.
(n)
Rule
462(b)
Registration Statement.
In the event that a Rule 462(b) Registration
Statement is filed in connection with the offering contemplated by this Agreement, such Rule 462(b)
Registration Statement shall have been filed with the Commission on the date of this Agreement and
shall have become effective automatically upon such filing.
(o)
Consummation of the New Senior Credit Facilities and Reorganization Transactions.
Substantially concurrent with the sale of the Offered Shares as contemplated by this Agreement, the
Company shall have entered into the new senior secured credit facilities and the reorganization
transactions shall have been consummated (each as described in the Time of Sale Prospectus).
(p)
Additional Documents.
On or before each of the First Closing Date and each Option Closing
Date, the Representatives and counsel for the Underwriters shall have received such information,
documents and opinions as they may reasonably request for the purposes of enabling them to pass
upon the issuance and sale of the Offered Shares as contemplated herein, or in order to evidence
the accuracy of any of the representations and warranties, or the satisfaction of any of the
conditions or agreements, herein contained; and all proceedings taken by the
30
Company
in connection with the issuance and sale of the Offered Shares as contemplated herein and in
connection with the other transactions contemplated by this Agreement shall be reasonably
satisfactory in form and substance to the Representatives and counsel for the Underwriters
.
If any condition specified in this Section 6 is not satisfied when and as required to be
satisfied, this Agreement may be terminated by the Representatives by notice to the Company and the
Selling Shareholders at any time on or prior to the First Closing Date and, with respect to the
Optional Shares, at any time on or prior to the applicable Option Closing Date, which termination
shall be without liability on the part of any party to any other party, except that Section 4
Section 7, Section 9 and Section 10 shall at all times be effective and shall survive such
termination.
Section 7. Reimbursement of Underwriters Expenses.
If this Agreement is terminated by the
Representatives pursuant to Section 6, Section 8 or Section 12, or if the sale to the Underwriters
of the Offered Shares on the First Closing Date is not consummated because of any refusal,
inability or failure on the part of the Company or the Selling Shareholders to perform any
agreement herein or to comply with any provision hereof, the Company agrees to reimburse the
Representatives and the other Underwriters (or such Underwriters as have terminated this Agreement
with respect to themselves), severally, upon demand for all reasonably and properly documented
out-of-pocket expenses that shall have been actually and reasonably incurred by the Representatives
and the Underwriters in connection with the proposed purchase and the offering and sale of the
Offered Shares, including but not limited to reasonable fees and disbursements of counsel not to
exceed in any event $700,000, printing expenses and reasonable travel expenses.
Section 8. Effectiveness of this Agreement.
This Agreement shall not become effective until
the later of (i) the execution of this Agreement by the parties hereto and (ii) notification by the
Commission to the Company and the Representatives of the effectiveness of the Registration
Statement under the Securities Act. Prior to such effectiveness, this Agreement may be terminated
by any party by notice to each of the other parties hereto, and any such termination shall be
without liability on the part of (a) the Company or the Selling Shareholders to any Underwriter,
except that the Company and the Selling Shareholders shall be obligated to reimburse certain
expenses of the Representatives and the Underwriters pursuant to Sections 4 and 7 hereof, (b) any
Underwriter to the Company or the Selling Shareholders, or (c) any party hereto to any other party
except that the provisions of Section 9 and Section 10 shall at all times be effective and shall
survive such termination.
Section 9. Indemnification.
(a)
Indemnification of the Underwriters.
The Company agrees to indemnify and hold harmless
each Underwriter, its officers and directors, and each person, if any, who controls any Underwriter
within the meaning of the Securities Act or the Exchange Act, against any loss, claim, damage,
liability or expense, as incurred, to which such Underwriter or such officer, director or
controlling person may become subject, under the Securities Act, the Exchange Act, other federal or
state statutory law or regulation, or the laws or regulations of foreign jurisdictions where
Offered Shares have been offered or sold or at common law or otherwise (including in settlement of
any litigation, if such settlement is effected in accordance with Section 9(e)), insofar as such
loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below)
arises out of or is based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, or any amendment thereto, including any
information deemed to be a part thereof pursuant to Rule 430A promulgated under the Securities Act,
or the omission or alleged omission therefrom of a material fact required to be stated therein
31
or
necessary to make the statements therein not misleading; or (ii) any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus, the Time of Sale
Prospectus, any free writing prospectus that the Company has used, referred to or filed, or is
required to file, pursuant to Rule 433(d) promultaged under the Securities Act or the Prospectus
(or any amendment or supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; or (iii) any act or failure to act or any alleged act
or failure to act by any Underwriter in connection with, or relating in any manner to, the Shares
or the offering contemplated hereby, and which is included as part of or referred to in any loss,
claim, damage, liability or action arising out of or based upon any matter covered by clause (i) or
(ii) above, provided that the Company shall not be liable under this clause (iii) to the extent
that a court of competent jurisdiction shall have determined by a final judgment that such loss,
claim, damage, liability or action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through its bad faith or willful misconduct;
and to reimburse each Underwriter and each such officer, director and controlling person for any
and all properly documented expenses (including the fees and disbursements of counsel chosen by the
Representatives) as such expenses are reasonably incurred by such Underwriter or such officer,
director or controlling person in connection with investigating, defending, settling, compromising
or paying any such loss, claim, damage, liability, expense or action;
provided
,
however
, that the
foregoing indemnity agreement shall not apply to any loss, claim, damage, liability or expense to
the extent, but only to the extent, arising out of or based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and in conformity with
written information furnished to the Company by the Representatives expressly for use in the
Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, any such free
writing prospectus or the Prospectus (or any amendment or supplement thereto), it being understood
and agreed that the only such information furnished by the Representatives to the Company consists
of the information described in subsection (c) below. This indemnity agreement set forth in this
Section 9(a) shall be in addition to any liabilities that the Company may otherwise have under this
Agreement.
(b)
Indemnification of the Selling Shareholders.
Each Selling Shareholder agrees, severally
and not jointly, to indemnify and hold harmless each Underwriter, its officers, directors and each
person, if any, who controls any Underwriter within the meaning of the Securities Act or the
Exchange Act, against any loss, claim, damage, liability or expense, as incurred, to which any
Underwriter, or any such director, officer, or controlling person may become subject, under the
Securities Act, the Exchange Act, or other federal or state statutory law or regulation, or at
common law or otherwise (including in settlement of any litigation, if such settlement is effected
in accordance with Section 9(e)), insofar as such loss, claim, damage, liability or expense (or
actions in respect thereof as contemplated below) arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in the Registration Statement,
any preliminary prospectus, the Time of Sale Prospectus, any free writing prospectus that the
Company has used, referred to or filed, or is required to file, pursuant to Rule 433(d) promulgated
under the Securities Act or the Prospectus (or any amendment or supplement thereto), or arises out
of or is based upon the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in the Registration Statement, such preliminary prospectus, the Time
of Sale Prospectus, such free writing prospectus that the Company has used, referred to or
filed, or is required to file, pursuant to Rule 433(d) promulgated under the Securities Act,
the Prospectus (or such amendment or supplement thereto), in reliance upon and in conformity with
written information furnished to the Company by such Selling Shareholder expressly for use
32
therein;
and to reimburse each Underwriter, or any such director, officer, or controlling person for any
properly documented legal and other expense reasonably incurred by each Underwriter, or any such
director, officer, or controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or action;
provided
, that
the liability of such Selling Shareholder under the foregoing indemnity shall be limited to an
amount equal to the product of the number of the Offered Shares sold by such Selling Shareholder
and the initial public offering price of the Offered Shares (less the related underwriting
discounts and commissions) set forth on the front cover page of the Prospectus. The indemnity
agreement set forth in this Section 9(b) shall be in addition to any liabilities that such Selling
Shareholder may otherwise have under this Agreement.
(c)
Indemnification
of the Company, its Directors and Officers and the Selling Shareholders.
Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company,
each of its directors, each of its officers who signed the Registration Statement, the Selling
Shareholders (including each of their respective directors, officers,
managers, members and partners) and each person, if any, who controls the Company or any Selling Shareholder within
the meaning of the Securities Act or the Exchange Act, against any loss, claim, damage, liability
or expense, as incurred, to which the Company, or any such director, officer, Selling Shareholder
(or its directors, officers,
managers, members or partners) or controlling person may become subject, under the Securities Act, the Exchange Act, or other
federal or state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written consent of such
Underwriter), insofar as such loss, claim, damage, liability or expense (or actions in respect
thereof as contemplated below) arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, any preliminary
prospectus, the Time of Sale Prospectus, any free writing prospectus that the Company has used,
referred to or filed, or is required to file, pursuant to Rule 433(d) promulgated under the
Securities Act or the Prospectus (or such amendment or supplement thereto), or arises out of or is
based upon the omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, such preliminary prospectus, the Time of Sale
Prospectus, such free writing prospectus that the Company has used, referred to or filed, or is
required to file, pursuant to Rule 433(d) promulgated under the Securities Act, the Prospectus (or
such amendment or supplement thereto), in reliance upon and in conformity with written information
furnished to the Company and/or the Selling Shareholders by the Representatives expressly for use
therein; and to reimburse the Company, or any such director, officer, Selling Shareholder or
controlling person for any legal and other expense reasonably incurred by the Company, or any such
director, officer, Selling Shareholder (or its directors, officers,
managers, members or partners) or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage, liability, expense or
action. The Company and each of the Selling Shareholders, hereby acknowledges that the only
information that the Representatives and the Underwriters have furnished to the Company and the
Selling Shareholders expressly for use in the Registration Statement, any preliminary prospectus,
the Time of Sale Prospectus, any free writing prospectus that the Company has filed, or is required
to file, pursuant to Rule 433(d) promulgated under the Securities Act or the Prospectus (or any
amendment or supplement thereto) are the statements set forth in the table in the second paragraph
and the paragraphs under the caption UnderwritingPrice Stabilization, Short Positions and
Penalty Bids in the Companys Preliminary Prospectus relating to the offering of the Offered
Shares. The indemnity agreement set forth in this Section
9(c) shall be in addition to any liabilities that each Underwriter may otherwise have under
this Agreement.
33
(d)
Notifications and Other Indemnification Procedures.
Promptly after receipt by an
indemnified party under this Section 9 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 9, notify the indemnifying party in writing of the commencement thereof, but the
omission so to notify the indemnifying party will not relieve it from any liability which it may
have to any indemnified party for contribution or otherwise than under the indemnity agreement
contained in this Section 9, except to the extent it is prejudiced as a result of such failure. In
case any such action is brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it shall elect, jointly with all other indemnifying parties
similarly notified, by written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party;
provided
,
however
, if the defendants in any such
action include both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded based on the advice of outside counsel that representation of both
parties would be inappropriate due to an actual conflict of interest or that there may be legal
defenses available to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise participate in the defense
of such action on behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of such indemnifying partys election so to assume the
defense of such action and approval by the indemnified party of such counsel, not to be
unreasonably withheld, the indemnifying party will not be liable to such indemnified party under
this Section 9 for any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party shall have employed separate
counsel in accordance with the proviso to the preceding sentence (it being understood, however,
that the indemnifying party shall not be liable for the fees and expenses of more than one separate
counsel (together with local counsel), representing the indemnified parties who are parties to such
action), which counsel (together with any local counsel) for the indemnified parties shall be
selected by the Representatives (in the case of counsel for the indemnified parties referred to in
Sections 9(a) and 9(b) above) or by the Company (in the case of counsel for the indemnified parties
referred to in Section 9(c) above), (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified party within a
reasonable time after notice of commencement of the action or (iii) the indemnifying party has
authorized in writing the employment of counsel for the indemnified party at the expense of the
indemnifying party, in each of which cases the fees and expenses of counsel shall be at the expense
of the indemnifying party and shall be paid as they are incurred.
(e)
Settlements.
The indemnifying party under this Section 9 shall not be liable for any
settlement of any proceeding effected without its written consent, but if settled with such consent
or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by Section 9(d) hereof, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its written consent if (i)
such settlement is entered into more than 60 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such settlement or have
not otherwise notified such indemnified party in good faith that such indemnifying party is
contesting the amount of such reimbursement request. No indemnifying party shall, without the prior
written
34
consent of the indemnified party, effect any settlement, compromise or consent to the entry
of judgment in any pending or threatened action, suit or proceeding in respect of which any
indemnified party is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or consent includes an
unconditional release of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
(f)
Indemnification of the QIU.
Without limitation and in addition to its obligation under
the other subsections of this Section 9, the Company agrees to indemnify and hold harmless the QIU,
its officers and directors and each person, if any, who controls the QIU within the meaning of the
Securities Act or the Exchange Act, from and against any loss, claim, damage, liabilities or
expense, as incurred, arising out of or based upon the QIUs acting as a qualified independent
underwriter (within the meaning of Rule 2720 of the NASDs Conduct Rules) in connection with the
offering contemplated by this Agreement, and agrees to reimburse each such indemnified person for
any properly documented legal or other expense reasonably incurred by them in connection with
investigating, defending, settling, compromising or paying any such loss, claim, damage, liability,
expense or action;
provided, however
, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or expense results from the bad faith, gross
negligence or willful misconduct of the QIU.
(g)
Indemnification for the Directed Shares
. In connection with the offer and sale of the Directed
Shares, the Company agrees, promptly upon a request in writing, to indemnify and hold harmless the
Underwriters from and against any and all losses, liabilities, claims, damages and expenses
incurred by them as a result of the failure of the Participants to pay for and accept
delivery of Directed Shares which, by the end of the first business day following the date of this
Agreement, were subject to a properly confirmed agreement to purchase. The Company agrees to
indemnify and hold harmless Jefferies, its officers and employees, and each person, if any, who
controls Jefferies within the meaning of the Securities Act or the Exchange Act against any loss,
claim, damage, liability or expense, as incurred, to which Jefferies or such controlling person may
become subject, which is (i) caused by any untrue statement or alleged untrue statement of a material fact contained in any material prepared by or with the
consent of the Company for distribution to Participants in connection with the
Directed Share Program or caused by any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make
the statements therein not misleading; (ii) caused by the failure of any Participant to pay for and accept
delivery of Directed Shares that such Participant agreed to purchase; or (iii) related to, arising
out of, or in connection with the Directed Share Program. The indemnity agreement set forth in
this paragraph shall be in addition to any liabilities that the Company may otherwise have under
this Agreement.
Section 10. Contribution.
If the indemnification provided for in Section 9 is for any reason
held to be unavailable to or otherwise insufficient to hold harmless an indemnified party in
respect of any losses, claims, damages, liabilities or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified
party, as incurred, as a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Shareholders, on the one hand, and the Underwriters, on the other hand,
from the offering of the Offered Shares pursuant to this Agreement or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company and the Selling Shareholders, on the one hand, and the Underwriters,
on the other hand, in connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling Shareholders, on the one hand, and
the Underwriters, on the other hand, in connection with the offering of the Offered Shares pursuant
to this Agreement shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the Offered Shares pursuant to this Agreement received by the Company
and the Selling Shareholders, and the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth on the front cover page of the Prospectus. The relative
fault of the Company and the Selling Shareholders, on the one hand, and the Underwriters, on the
other hand, shall be determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Selling Shareholders, on the one hand,
or the Underwriters, on the other hand, and the parties relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the limitations set forth in
Section 9(d), any properly documented legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim. The
35
provisions set forth
in Section 9(d) with respect to notice of commencement of any action shall apply if a claim for
contribution is to be made under this Section 10;
provided, however,
that no additional notice
shall be required with respect to any action for which notice has been given under Section 9(d) for
purposes of indemnification.
The Company, the Selling Shareholders and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 10 were determined by pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred to in this Section
10.
Notwithstanding the provisions of this Section 10, no Underwriter shall be required to
contribute any amount in excess of the underwriting discounts and commissions received by such
Underwriter in connection with the Offered Shares underwritten by it and distributed to the public.
Notwithstanding the provisions of this Section 10, no Selling Shareholder shall be required to
contribute any amount in excess of the product of the number of Offered Shares sold by such Selling
Shareholder and the initial public offering price of the Offered Shares (less the related
underwriting discounts and commissions) set forth on the front cover page of the Prospectus. No
person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters obligations to contribute pursuant to this Section
10 are several, and not joint, in proportion to their respective underwriting commitments as set
forth opposite their respective names on
Schedule A
. The Selling Shareholders obligations
to contribute pursuant to this Section 10 are several, and not joint, in proportion to the proceeds
of the Offered Shares sold by each such Selling Shareholder divided by the proceeds of the Offered
Shares sold by all of the Selling Shareholders. For purposes of this Section 10, each officer and
employee of an Underwriter and each person, if any, who controls an Underwriter within the meaning
of the Securities Act or the Exchange Act shall have the same rights to contribution as such
Underwriter, each director of the Company, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company with the meaning of the Securities Act
and the Exchange Act shall have the same rights to contribution as the Company, and each officer
and employee of a Selling Shareholder and each person, if any, who controls a Selling Shareholder
within the meaning of the Securities Act or the Exchange Act shall have the same rights to
contribution as such Selling Shareholder.
Section 11. Default of One or More of the Several Underwriters.
If, on the First Closing Date
or the applicable Option Closing Date, as the case may be, any one or more of the several
Underwriters shall fail or refuse to purchase Offered Shares that it or they have agreed to
purchase hereunder on such date, and the aggregate number of Offered Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Offered Shares to be purchased on such date, the Representatives may make
arrangements reasonably satisfactory to the Company and the Selling Shareholders for the purchase
of such Offered Shares by other persons, including any of the Underwriters, but if no such
arrangements are made by such Closing Date, the other Underwriters shall be obligated, severally
and not jointly, in the proportions that the number of Firm Shares set forth opposite their
respective names on
Schedule A
bears to the aggregate number of Firm Shares set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as may be specified by the Representatives with the consent of the non-defaulting
Underwriters, to purchase the Offered Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase on such date. If, on the First Closing Date or the
applicable Option Closing Date, as the case may be, any one or more of the Underwriters shall
36
fail
or refuse to purchase Offered Shares and the aggregate number of Offered Shares with respect to
which such default occurs exceeds 10% of the aggregate number of Offered Shares to be purchased on
such date, and arrangements satisfactory to the Representatives, the Company and the Selling
Shareholders for the purchase of such Offered Shares are not made within 48 hours after such
default, this Agreement shall terminate without liability of any party to any other party except
that the provisions of Section 4, Section 7, Section 9 and Section 10 shall at all times be
effective and shall survive such termination. In any such case either the Representatives or the
Company shall have the right to postpone the First Closing Date or the applicable Option Closing
Date, as the case may be, but in no event for longer than seven days in order that the required
changes, if any, to the Registration Statement and the Prospectus or any other documents or
arrangements may be effected.
As used in this Agreement, the term
Underwriter
shall be deemed to include any person
substituted for a defaulting Underwriter under this Section 11. Any action taken under this
Section 11 shall not relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
Section 12. Termination of this Agreement
.
Prior to the purchase of the Firm Shares by the
Underwriters on the First Closing Date this Agreement may be terminated by the Representatives by
notice given to the Company and the Selling Shareholders if at any time (i) trading in securities
generally on either the Nasdaq Stock Market or the New York Stock Exchange shall have been
suspended or limited, or minimum or maximum prices shall have been generally established on any of
such stock exchanges by the Commission or FINRA; (ii) a general banking moratorium shall have been
declared by federal or New York State authorities; (iii) there shall have occurred (A) any outbreak
or escalation of hostilities involving the United States or the declaration by the United States of
a national emergency or war, or (B) any substantial change in the United States or international
political, financial or economic conditions if the effect of any such event described in subclause
(A) or (B) of this clause, in the judgment of the Representatives, is material and adverse and
makes it impracticable to market the Offered Shares in the manner and on the terms described in the
Time of Sale Prospectus or the Prospectus or to enforce contracts for the sale of securities; or
(iv) in the judgment of the Representatives there shall have occurred any Material Adverse Change.
Any termination pursuant to this Section 12 shall be without liability on the part of (a) the
Company or the Selling Shareholders to any Underwriter, except that the Company and the Selling
Shareholders, shall be obligated to reimburse the expenses of the Representatives and the
Underwriters pursuant to Sections 4 and 7 hereof, (b) any Underwriter to the Company or the
Selling Shareholders, or (c) of any party hereto to any other party except that the provisions of
Section 9 and Section 10 shall at all times be effective and shall survive such termination..
Section 13. No Advisory or Fiduciary Relationship.
The Company acknowledges and agrees that
(a) the purchase and sale of the Offered Shares pursuant to this Agreement, including the
determination of the public offering price of the Offered Shares and any related discounts and
commissions, is an arms-length commercial transaction between the Company, on the one hand, and
the several Underwriters, on the other hand, (b) in connection with the offering contemplated
hereby and the process leading to such transaction each Underwriter is and has been acting solely
as a principal and is not the agent or fiduciary of the Company, or its shareholders, creditors,
employees or any other party, (c) no Underwriter has assumed or will assume an
advisory or fiduciary responsibility in favor of the Company with respect to the offering
contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has
advised or is currently advising the Company on other matters) and no Underwriter has any
obligation to the Company with respect to the offering contemplated hereby except the
37
obligations expressly set forth in this Agreement, (d) the Underwriters and their respective affiliates may be
engaged in a broad range of transactions that involve interests that differ from those of the
Company, and (e) the Underwriters have not provided any legal, accounting, regulatory or tax advice
with respect to the offering contemplated hereby and the Company has consulted its own legal,
accounting, regulatory and tax advisors to the extent it deemed appropriate.
Section 14. Representations and Indemnities to Survive Delivery
.
The respective indemnities,
agreements, representations, warranties and other statements of the Company, of the Selling
Shareholders and of the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on behalf of any
Underwriter or the Company or any of its or their partners, officers or directors or any
controlling person, or the Selling Shareholders, as the case may be, and, anything herein to the
contrary notwithstanding, will survive delivery of and payment for the Offered Shares sold
hereunder and any termination of this Agreement.
Section 15. Notices.
All communications hereunder shall be in writing and shall be mailed,
hand delivered or telecopied and confirmed to the parties hereto as follows:
If to the Representatives:
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Jefferies & Company, Inc.
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520 Madison Avenue
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New York, New York 10022
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Facsimile: (212) 284-2280
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Attention: General Counsel
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Piper Jaffray & Co.
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150 East 42
nd
Street
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New York, New York 10017
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Facsimile: (212) 284-9592
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Attention: General Counsel
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Wells Fargo Securities, LLC
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375 Park Avenue
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New York, New York 10152
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Facsimile: (212) 214-5911
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Attention: General Counsel
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If to the Company:
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Bravo Brio Restaurant Group, Inc.
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777 Goodale Boulevard, Suite 100
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Columbus, Ohio 43212
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Facsimile: (614) 326-7943
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Attention: President and Chief Executive Officer
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If to the Selling Shareholders:
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Wells Fargo Shareowner Services
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161 North Exchange
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South Saint Paul, Minnesota 55075
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38
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Facsimile: (651) 450-4078
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Attention: Chad Fitzgerald
|
Any party hereto may change the address for receipt of communications by giving written notice to
the other parties hereto.
Section 16. Successors
.
This Agreement will inure to the benefit of and be binding upon the
parties hereto, including any substitute Underwriters pursuant to Section 11 hereof, and to the
benefit of the officers, directors and controlling persons referred to in Section 9 and Section 10,
and in each case their respective successors, and no other person will have any right or obligation
hereunder. The term successors shall not include any purchaser of the Offered Shares as such
from any of the Underwriters merely by reason of such purchase.
Section 17. Partial Unenforceability.
The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or enforceability of any
other Section, paragraph or provision hereof. If any Section, paragraph or provision of this
Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be
made such minor changes (and only such minor changes) as are necessary to make it valid and
enforceable.
Section 18. Governing Law Provisions
.
This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York applicable to agreements made and to be
performed in such state. Any legal suit, action or proceeding arising out of or based upon this
Agreement or the transactions contemplated hereby may be instituted in the federal courts of the
United States of America located in the Borough of Manhattan in the City of New York or the courts
of the State of New York in each case located in the Borough of Manhattan in the City of New York
(collectively, the
Specified Courts
), and each party irrevocably submits to the exclusive
jurisdiction (except for proceedings instituted in regard to the enforcement of a judgment of any
such court, as to which such jurisdiction is non-exclusive) of such courts in any such suit, action
or proceeding. Service of any process, summons, notice or document by mail to such partys address
set forth above shall be effective service of process for any suit, action or other proceeding
brought in any such court. The parties irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action or other proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any such suit, action
or other proceeding brought in any such court has been brought in an inconvenient forum.
Section 19. Failure of One or More of the Selling Shareholders to Sell and Deliver Offered
Shares
.
If one or more of the Selling Shareholders shall fail to sell and deliver to the
Underwriters the Offered Shares to be sold and delivered by such Selling Shareholders at the First
Closing Date or the applicable Option Closing Date pursuant to this Agreement, then the
Underwriters may at their option, by written notice from the Representatives to the Company and the
Selling Shareholders, either (i) terminate this Agreement without any liability on the part of any
Underwriter or, except as provided in Sections 4, 7, 9 and 10 hereof, the Company or the other
Selling Shareholders, or (ii) purchase the shares which the Company and the other Selling
Shareholders have agreed to sell and deliver in accordance with the terms hereof. If one or more
of the Selling Shareholders shall fail to sell and deliver to the Underwriters the Offered Shares
to be sold and delivered by such Selling Shareholders pursuant to this Agreement at the First
Closing Date or the applicable Option Closing Date, then the Underwriters shall have the right, by
written notice from the Representatives to the Company and the Selling Shareholders, to
postpone the First Closing Date or the applicable Option Closing Date, as the case may be, but
in
39
no event for longer than seven days in order that the required changes, if any, to the
Registration Statement and the Prospectus or any other documents or arrangements may be effected.
Section 20. General Provisions.
This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter hereof. This
Agreement may be executed in two or more counterparts, each one of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same instrument. This
Agreement may not be amended or modified except in a writing signed by all of the parties hereto,
and no condition herein (express or implied) may be waived unless waived in writing by each party
whom the condition is meant to benefit. The Section headings herein are for the convenience of the
parties only and shall not affect the construction or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated business person who was
adequately represented by counsel during negotiations regarding the provisions hereof, including,
without limitation, the indemnification provisions of Section 9 and the contribution provisions of
Section 10, and is fully informed regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Sections 9 and 10 hereto fairly allocate the risks in light of
the ability of the parties to investigate the Company, its affairs and its business in order to
assure that adequate disclosure has been made in the Registration Statement, any preliminary
prospectus, the Time of Sale Prospectus, each free writing prospectus and the Prospectus (and any
amendments and supplements thereto), as required by the Securities Act and the Exchange Act.
[Signatures Follow]
40
If the foregoing is in accordance with your understanding of our agreement, kindly sign and return
to the Company and the Custodian the enclosed copies hereof, whereupon this instrument, along with
all counterparts hereof, shall become a binding agreement in accordance with its terms.
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Very truly yours,
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BRAVO BRIO RESTAURANT GROUP, INC.
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By:
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[Title]
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[SELLING SHAREHOLDERS]
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By:
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(Attorney-in-fact)
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The foregoing Underwriting Agreement is hereby confirmed and accepted by the Representatives in New
York, New York as of the date first above written.
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JEFFERIES & COMPANY, INC.
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PIPER JAFFRAY & CO.
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Acting as Representatives of the
several Underwriters named in
the attached
Schedule A
.
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JEFFERIES & COMPANY, INC.
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By:
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Authorized Signatory
|
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PIPER JAFFRAY & CO.
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By:
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Authorized Signatory
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WELLS FARGO SECURITIES, LLC
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By:
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Authorized Signatory
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41
SCHEDULE A
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Number of
|
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Firm Shares
|
Underwriters
|
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to be Purchased
|
Jefferies & Company, Inc.
|
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|
[___]
|
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Piper Jaffray & Co.
|
|
|
[___]
|
|
Wells Fargo Securities, LLC
|
|
|
[___]
|
|
Key Banc Capital Markets, Inc.
|
|
|
[___]
|
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Morgan Keegan & Co., Inc.
|
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|
[___]
|
|
|
|
|
|
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Total
|
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8,333,000
|
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SCHEDULE B
|
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Maximum
|
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Number of
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Number of
|
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|
Firm Shares
|
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Optional Shares
|
Selling Shareholder
|
|
to be Sold
|
|
to be Sold
|
Bruckmann, Rosser, Sherill & Co. II L.P.
|
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1,575,278
|
|
|
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590,765
|
|
c/o Bruckmann, Rosser, Sherrill & Co., Inc.
126 East 56th Street
New York, New York 10022
Attention: Harold Rosser II
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|
|
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|
|
|
|
|
|
|
|
CHBravo Holding I LLC
|
|
|
1,577,335
|
|
|
|
591,536
|
|
c/o Castle Harlan, Inc.
150 East 58th Street,
New York, New York 10155
Attention: [___]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Golub Capital Partners IV, L.P.
|
|
|
74,304
|
|
|
|
27,866
|
|
c/o Golub Capital
551 Madison Avenue, 6
th
Floor
New York, New York 10022
Attention: [___]
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Golub Capital Coinvestment L.P.
|
|
|
104,026
|
|
|
|
39,012
|
|
c/o Golub Capital
551 Madison Avenue, 6
th
Floor
New York, New York 10022
Attention: [___]
|
|
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|
|
|
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|
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|
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|
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|
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Julie Frist
c/o Bruckmann Rosser, Sherrill & Co., Inc.
126 East 56
th
Street
New York, New York 10022
Attention: [___]
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2,057
|
|
|
|
771
|
|
|
|
|
|
|
|
|
|
|
Total:
|
|
|
3,333,000
|
|
|
|
1,249,950
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SCHEDULE C
Schedule of Free Writing Prospectuses included in the Time of Sale Prospectus
Exhibit 10.16
EXCHANGE AGREEMENT
dated as of October ____, 2010
by and among
BRAVO BRIO RESTAURANT GROUP, INC.,
BRAVO DEVELOPMENT HOLDINGS LLC
and
ALL OTHER SHAREHOLDERS OF BRAVO BRIO RESTAURANT GROUP, INC.
EXCHANGE AGREEMENT
This is an Exchange Agreement (this
Agreement
) dated as of October __ 2010, by and
among Bravo Brio Restaurant Group, Inc., an Ohio corporation (the
Company
), Bravo
Development Holdings LLC, a Delaware limited liability company and majority shareholder of the
Company (
Holdings
), and all other shareholders of the Company (which shareholders are
listed on the signature pages hereto) (together with Holdings, the
Shareholders
).
RECITALS
WHEREAS, the Company is contemplating an initial public offering (the
Offering
) of
its Common Shares, no par value per share (such shares, the
New Common Shares
), pursuant
to a registration statement on Form S-1 filed with the U.S. Securities and Exchange Commission (the
Commission
) on July 1, 2010, as the same may be amended from time to time (the
Registration Statement
);
WHEREAS, as of the date hereof, the Shareholders constitute all the shareholders of the
Company and own of record the number of shares of the Companys Common Stock, par value $.001 per
share (such shares, the
Existing Common Shares
), and shares of the Companys Series A 14%
Cumulative Compounding Preferred Stock, par value $.001 per share (such shares, the
Existing
Preferred Shares
), as set forth opposite each of the Shareholders names on
Exhibit A
hereto, which shares constitute as of the date hereof, and will constitute immediately prior to the
exchange transactions described below, all of the issued and outstanding Existing Common Shares and
Existing Preferred Shares;
WHEREAS, in anticipation of the Offering, the parties hereto desire that, immediately prior to
the consummation of the Offering, (i) the Existing Common Shares will be exchanged for New Common
Shares in accordance with the terms hereof and (ii) immediately following the exchange of Existing
Common Shares for New Common Shares, the Existing Preferred Shares will be exchanged for New Common
Shares in accordance with the terms hereof;
WHEREAS, immediately prior to the consummation of the exchange transactions described above,
the Company will adopt and file with the Secretary of State of the State of Ohio its Second Amended
and Restated Articles of Incorporation (the
New Articles of Incorporation
) reflecting the
Companys new capital structure, including the authorization of the New Common Shares, and certain
other changes necessitated by the Offering;
WHEREAS, it is contemplated that, immediately after the consummation of the exchange
transactions described above but immediately prior to the consummation of the Offering, Holdings
will effectuate (i) the dissolution of Holdings and (ii) the distribution of the New Common Shares
received by Holdings pursuant to the exchange transactions described above to its members in
proportion to their ownership of outstanding membership units of Holdings; and
1
WHEREAS, the above-referenced changes to the Companys capital structure are intended to
constitute reorganizations pursuant to Section 368(a)(1) of the Internal Revenue Code of 1986, as
amended (the
Code
), and this Agreement is being entered into in connection with that
certain Agreement and Plan of Reorganization, dated as of the date hereof and attached as
Exhibit B
hereto (the
Plan of Reorganization
), which shall be deemed to
constitute a plan or reorganization within the meaning of Code Section 368(a) and Treasury
Regulations Section 1.368-2(g).
NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties,
covenants, agreements and conditions herein contained, and intending to be legally bound, the
parties hereto agree as follows:
AGREEMENT
ARTICLE I
THE EXCHANGES
1.1
Exchange of Existing Common Shares for New Common Shares
.
(a) At the Closing (as defined below), each Shareholder shall transfer and deliver to the
Company, free and clear of all liens, the number of Existing Common Shares held by such Shareholder
set forth opposite such Shareholders name in the second column of
Exhibit A
hereto, and,
in exchange therefor, the Company shall issue to such Shareholder the number of New Common Shares
set forth opposite such Shareholders name in the fourth column
of
Exhibit A
(such
exchange, the
Common Shares Exchange
). The number of New Common Shares set forth
opposite each such Shareholders name in the fourth column of
Exhibit A
was derived by
multiplying (i) the number of Existing Common Shares to be transferred and delivered by each such
Shareholder
by
(ii) 6.8898763, rounded to a whole share. The Existing Common Shares so
exchanged shall be deemed to be cancelled without further action of the Company.
(b) Prior to or at the Closing, each Shareholder shall surrender to the Company all stock
certificates evidencing Existing Common Shares owned by such Shareholder, free and clear of any
lien, claim or encumbrance, duly endorsed for transfer or accompanied by stock powers or
assignments duly executed with all necessary stock transfer stamps attached thereto. The
obligation of each party to close the Common Shares Exchange shall be conditioned on the
simultaneous closing by all the other parties to the Common Shares Exchange.
1.2
Exchange of Existing Preferred Shares for New Common Shares
.
(a) Prior to the consummation of the Offering and immediately subsequent to the Common Shares
Exchange, at the Closing, each Shareholder shall transfer and deliver to the Company, free and
clear of liens, the number of Existing Preferred Shares held by such Shareholder set forth opposite
such Shareholders name in the third column of
Exhibit A
hereto,
2
and, in exchange therefor, the Company shall issue to such Shareholder the number of New
Common Shares set forth opposite such Shareholders name in the
fifth column of
Exhibit A
(such exchange, the
Preferred Shares Exchange
). The number of New Common Shares set
forth opposite each such Shareholders name in the fifth column of
Exhibit A
was derived by
multiplying (i) the number of Existing Preferred Shares to be transferred and delivered by each
such Shareholder
by
(ii) 117.90974568263, rounded to a whole share. The Existing Preferred
Shares so exchanged shall be deemed to be cancelled without further action of the Company.
(b) Prior to or at the Closing, each Shareholder shall surrender all stock certificates
evidencing Existing Preferred Shares owned by such Shareholder, free and clear of any lien, claim
or encumbrance, duly endorsed for transfer or accompanied by stock powers or assignments duly
executed with all necessary stock transfer stamps attached thereto. The obligation of each party
to close the Preferred Shares Exchange shall be conditioned on the simultaneous closing by all the
other parties to the Preferred Shares Exchange.
1.3
Restrictive Legends
. It is understood and agreed that the certificates evidencing
the shares of New Common Shares to be delivered at the Closing, and each certificate issued upon
transfer thereof, shall bear the following legend, in addition to any other legends required by
Ohio law:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE
OFFERED AND SOLD ONLY IF SO REGISTERED OR IN A MANNER EXEMPT FROM
REGISTRATION UNDER SUCH ACT.
1.4
Transfer Taxes
. The Company will assume and pay all transfer taxes (but not
income, franchise or other taxes measured by receipts or income) which are payable in connection
with the execution, delivery and performance of this Agreement or the authorization and issuance of
or exchange for New Common Shares hereunder or in connection with any modification of this
Agreement. Each Shareholder will cooperate with the Company to obtain a refund of any such taxes
from governmental authorities, if applicable.
ARTICLE II
THE CLOSING
2.1
Closing
.
(a) Unless this Agreement shall have been earlier terminated in accordance with the terms of
this Agreement, the closing of the Preferred Shares Exchange shall take place on the date of but
immediately prior to the consummation of the Offering and the closing of the Common Shares Exchange
shall occur, without any action on the part of any party hereto, on the date of but immediately
prior to the closing of the Preferred Shares Exchange and simultaneously with the moment upon which
the New Articles of Incorporation filed with the Secretary of State
3
of the State of Ohio shall become effective (together, the
Closing
). The Closing
shall take place at the offices of the Company, 777 Goodale Blvd., Suite 100, Columbus, Ohio 43212.
The date of the Closing is referred to herein as the
Closing Date
.
(b) All obligations of the parties under this Agreement are subject to the condition precedent
that, concurrently with the closing of the Common Shares Exchange, the New Articles of
Incorporation shall have been filed with the Secretary of State of the State of Ohio and shall have
become effective.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1
Representations and Warranties of the Company
. The Company hereby represents and
warrants to the Shareholders, as of the date hereof and as of the Closing, as set forth below:
(a)
Existence, Qualification and Authority
. The Company is a corporation duly
organized, validly existing and in good standing under the laws of Ohio. The Company has all
requisite power and authority to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance by the Company of this
Agreement have been duly authorized by all necessary action. This Agreement has been duly executed
and delivered by the Company and constitutes the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except to the extent such
enforcement may be limited by applicable bankruptcy laws and other similar laws affecting
creditors rights generally.
(b)
New Common Shares
. The New Common Shares to be issued to the Shareholders
pursuant to this Agreement will be, when issued, (i) duly authorized, validly issued, fully paid
and nonassessable, (ii) free and clear of all liens, encumbrances, equities and claims (other than
securities law restrictions and restrictions under that certain (x) New Investors Securities
Holders Agreement, dated as of June 29, 2006, by and among the Company, Holdings and the other
investors and parties named therein (the
New Investors Securities Holders Agreement
) and
(y) Securities Holders Agreement, dated as of June 29, 2006, by and among the Company, Holdings,
Alton F. Doody III, John C. Doody and the other investors and parties named therein (the
Securities Holders Agreement
)) and (iii) issued without violation of any preemptive
rights.
3.2
Representations and Warranties of the Shareholders
. Each Shareholder, severally
and not jointly, hereby represents and warrants to the Company, as of the date hereof and as of the
Closing, as set forth below:
(a)
Existence, Qualification and Authority
.
(i) In respect of Holdings, Holdings is a limited liability company, duly organized, validly
existing and in good standing under the laws of Delaware. The
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execution, delivery and performance by Holdings of this Agreement have been duly authorized by
all necessary action. Holdings has the requisite power, authority and legal right to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
(ii) In respect of each Shareholder, other than Holdings, such Shareholder has the legal
capacity to execute and deliver this Agreement and to consummate the transactions contemplated
hereby.
(iii) This Agreement has been duly executed and delivered by such Shareholder and constitutes
the legal, valid and binding obligation of such Shareholder, enforceable against such Shareholder
in accordance with its terms, except to the extent such enforcement may be limited by applicable
bankruptcy laws and other similar laws affecting creditors rights generally.
(b)
Existing Common Shares and Existing Preferred Shares
. Such Shareholder owns of
record 100% of the Existing Common Shares and Existing Preferred Shares set forth opposite such
Shareholders name on
Exhibit A
hereto, free and clear of any lien, claim or encumbrance,
and, other than (x) the New Investors Securities Holders Agreement, (y) that certain Registration
Rights Agreement, dated as of June 29, 2006, by and among the Company, Holdings and the other
investors named therein and (z) the Securities Holders Agreement, as of the date hereof, there are
no, and immediately prior to the Closing there will be no, shareholder agreements, voting trusts,
proxies or other agreements or understandings with respect to the outstanding shares of capital
stock of the Company to which such Shareholder is a party.
(c)
Provisions Relating to Securities Laws
. Such Shareholder acknowledges that the
shares of New Common Shares received pursuant to the Common Shares Exchange and/or the Preferred
Shares Exchange, as the case may be, have not been registered under the Securities Act of 1933, as
amended (the
Securities Act
), or under any applicable state securities laws, and are
being issued in reliance on exemptions from the registration requirements of the Securities Act and
any applicable state securities or blue sky laws. Each Shareholder agrees to refrain from
transferring or otherwise disposing of the New Common Shares (other than, in the case of Holdings,
to its members) or any interest therein in such manner as to cause the Company to violate the
registration requirements of the Securities Act or any applicable state securities or blue sky
laws.
ARTICLE IV
OTHER MATTERS
4.1
Termination
. Anything herein or elsewhere to the contrary notwithstanding, this
Agreement may be terminated (and the transactions contemplated herein may be abandoned) at any time
before the Closing (a) by mutual written consent of Holdings, on the one hand, and the Company, on
the other hand or (b) by Holdings, on the one hand, or the Company, on the other hand, upon notice
given to the other, if any governmental authority shall have issued an order, decree or ruling or
taken any other action permanently restraining, enjoining or otherwise
5
prohibiting the transactions contemplated by this Agreement. In the event of any termination
of this Agreement as provided in this Section 4.1, (i) written notice thereof shall promptly be
given to the other parties hereto and this Agreement shall forthwith become wholly void and
terminate and of no further force and effect except for this Section 4.1 (Termination) and Sections
4.3 (Further Assurances; Lock-up), 4.5 (Assignment and Binding Effect), 4.6 (Amendment and Waiver),
4.7 (Notices), 4.8 (Applicable Law; Consent to Jurisdiction), 4.9 (No Benefit to Others), 4.10
(Headings), 4.11 (Severability), 4.12 (Counterparts) and 4.13 (Independent Nature of Obligations
and Rights), and (ii) there shall be no liability on the part of any of the parties hereto, except
that such termination shall not preclude any party from pursuing judicial remedies for damages
and/or other relief as a result of the breach by the other party of any representation, warranty,
covenant or agreement contained herein prior to such termination.
4.2
Termination of Agreements
. The Company and the Shareholders party to the New
Investors Securities Holders Agreement and/or the Securities Holders Agreement agree that,
effective as of the Closing, such agreements automatically shall be terminated in their entirety,
shall be null and void and shall no longer be in full force and effect and that all rights and
obligations thereunder shall cease upon the Closing.
4.3
Further Assurances
. Each of the parties shall from time to time after the Closing
Date, at the reasonable request of any other party, execute, acknowledge and deliver to such other
party such other instruments of conveyance and transfer or assumption and will take such other
actions and execute and deliver such other documents, certifications and further assurances as such
other party may reasonably require in order to effect the transactions contemplated hereby and will
use commercially reasonable efforts to cooperate with the other parties and execute and deliver to
the other parties such other instruments and documents and take such other actions as may be
reasonably requested from time to time by such other party as necessary to carry out, evidence and
confirm the intended purposes of this Agreement.
4.4
Contents of Agreement
. This Agreement, including the Exhibits hereto, and, with
respect to the Company and Holdings only, the Plan of Reorganization, sets forth the entire
understanding of the parties hereto with respect to the transactions contemplated hereby and
supersedes any and all previous agreements and understandings, oral or written, between or among
the parties regarding the transactions contemplated hereby. The transactions contemplated hereby
constitute a reclassification within the meaning of Rule 16b-7 promulgated under the Securities
Exchange Act of 1934, as amended.
4.5
Assignment and Binding Effect
. This Agreement may not be assigned by any party
without the prior written consent of the other parties. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each party.
4.6
Amendment and Waiver
. Except for as expressly set forth herein, this Agreement
shall not be amended or modified, and no provision hereof shall be waived, except by written
instrument duly executed by each of the parties hereto. The grant of a waiver in one instance does
not constitute a continuing waiver in all similar instances. No failure to exercise, and no
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delay in exercising, by any party, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof.
4.7
Notices
. Any notice, request, demand, waiver, consent, approval or other
communication which is required or permitted hereunder shall be in writing and shall be deemed
given only if delivered personally, delivered by courier or sent by registered or certified mail or
by Federal Express or other overnight mail service, postage prepaid, or by facsimile, with written
confirmation to follow, as follows:
If to the Company, to:
Bravo Brio Restaurant Group, Inc.
777 Goodale Blvd.
Suite 100
Columbus, Ohio 43212
Attention: Chief Executive Officer
Facsimile No.: (614) 326-7943
With a required copy to (which shall not itself constitute notice):
Dechert LLP
Cira Centre
2929 Arch Street
Philadelphia, PA 19104
Attention: Carmen J. Romano, Esq. and James A. Lebovitz, Esq.
Facsimile No.: (215) 994-2222
If to Holdings:
c/o Bruckmann, Rosser, Sherrill & Co., Inc.
126 East 56
th
Street, 29
th
Floor
New York, NY 10022
Attention: Harold O. Rosser, II
Facsimile No.: (212) 521-3799
With a required copy to (which shall not itself constitute notice):
Bruckmann, Rosser, Sherrill & Co., Inc.
126 East 56
th
Street, 29
th
Floor
New York, NY 10022
Attention: Harold O. Rosser, II
Facsimile No.: (212) 521-3799
Castle Harlan, Inc.
150 East 58
th
Street
7
New York, NY 10155
Attention: David B. Pittaway
Facsimile No.: (212) 593-5955
Dechert LLP
Cira Centre
2929 Arch Street
Philadelphia, PA 19104
Attention: Carmen J. Romano, Esq. and James A. Lebovitz, Esq.
Facsimile No.: (215) 994-2222
If to any other Shareholder, to such Shareholders address as set forth in the records of the
Company,
or to such other address or facsimile numbers as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver, consent, approval or
other communication will be deemed to have been given as of the date so delivered or, if such date
is not a business day, on the next business day.
4.8
Applicable Law; Consent to Jurisdiction
. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio, without giving effect to such States
laws and principles regarding the conflict of laws. Each of the parties hereto (a) consents to
submit itself to the personal jurisdiction of any federal court located in the State of Ohio or any
Ohio state court in connection with any dispute that arises out of this Agreement or any of the
transactions contemplated by this Agreement, (b) agrees that it will not attempt to deny or defeat
such personal jurisdiction by motion or other request for leave from any such court, (c) agrees
that it will not bring any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than a federal court sitting in the State of Ohio
or an Ohio state court unless venue would not be proper under rules applicable in such courts and
(d) waives any right to which it may be entitled, on account of place of residence or domicile.
4.9
No Benefit to Others
. The representations, warranties, covenants and agreements
contained in this Agreement are for the sole benefit of the parties hereto and their respective
heirs, executors, administrators, legal representatives, successors and permitted assigns, and they
shall not be construed as conferring any rights on any other persons.
4.10
Headings
. The headings in this Agreement are solely for convenience of reference
and shall not limit or otherwise affect the meaning of this Agreement.
4.11
Severability
. Any provision of this Agreement which is invalid or unenforceable
in any jurisdiction shall be ineffective to the extent of such invalidity or unenforceability
without invalidating or rendering unenforceable the remaining provisions hereof, and such
invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable
such provisions in any other jurisdiction.
8
4.12
Counterparts
. This Agreement may be executed in any number of counterparts and
any party hereto may execute any such counterpart, each of which when executed and delivered shall
be deemed to be an original and all of which counterparts taken together shall constitute but one
and the same instrument. This Agreement shall only become binding when one or more counterparts
taken together shall have been executed and delivered by all of the parties.
4.13
Independent Nature of Obligations and Rights
. The obligations of each Shareholder
under this Agreement are several and not joint with the obligations of each other party, and no
Shareholder shall be responsible in any way for the performance of the obligations of any other
party under this Agreement.
4.14
Remedies
. Each party to this Agreement acknowledges and agrees that in the event
of any breach of this Agreement by such party, any of the other parties hereto would be irreparably
harmed and could not be made whole by monetary damages. Each party accordingly agrees (i) to waive
the defense in any action for specific performance that a remedy at law would be adequate and (ii)
any of the other parties hereto, in addition to any other remedy to which it may be entitled at law
or in equity, shall be entitled to compel specific performance of this Agreement.
[
Signature Pages Follow
]
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IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of the date first
written above.
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BRAVO BRIO RESTAURANT GROUP, INC.
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By:
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Name:
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Title:
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SHAREHOLDERS
BRAVO DEVELOPMENT HOLDINGS LLC
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By:
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Name:
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Title:
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Alton F. Doody, III
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Saed Mohseni
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James J. OConnor
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[
Signature Page to Exchange Agreement
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Bret Adams
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Kathleen L. Chugh
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Mike Creedon
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Ronald F. Dee
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John C. Doody
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Alice Elliot
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Gary Ertl
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Vernessa W. Gates
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Matt Harding
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Joe Isbell
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[
Signature Page to Exchange Agreement
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Lance Juhas
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Timothy M. Kenrick
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Michael L. Moser
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Brian T. OMalley
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John Odachowski
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Jeff Ramm
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Diane Reed
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Lou Rios
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Nicole Roope
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Justin Stratford
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[
Signature Page to Exchange Agreement
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Laura Tappen
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Debbie Ticknor
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Tom Vahle
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Mike Woodburn
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Philip S. Yandolino
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[
Signature Page to Exchange Agreement
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